KUALA LUMPUR (Oct 28): The government today confirmed that it will implement its B7-biodiesel mandate -  which involves blending 7% palm oil methyl ester with 93% of petroleum diesel -  in stages beginning Nov 1.

Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas said the B7 programme will be implemented in Peninsular Malaysia on Saturday, and in Sabah, Sarawak and Labuan by December.

"It only takes about a month for companies to adjust their blending facilities," he told a press conference after opening the Palm Oil Trade Fair and Seminar Kuala Lumpur.

"It (B7 programme) is part of the government's (CPO) stock management programme and we are now studying possibility of moving higher to B10," he added.

Peninsular Malaysia has already completed its B5 mandate, with Sabah, Sarawak and Labuan close to completion.

Under the government's B5 programme, 5% of palm oil methyl ester will be added to diesel. Under the B7 programme, the percentage of palm oil will be raised to 7%.

Uggah said some of the blending facilities and plants in Sabah and Sarawak are still having some minor problems.

There are a total 15 facilities in East Malaysia, with about three facilities under construction.

Uggah said he has already instructed the Malaysian Palm Oil Board (MPOB) to ensure the plants in East Malaysia are completed by the end of November.

He said the implementation of the B7 programme will see the consumption of  575,000 tonnes of biodiesel, contributing to savings of 667.6 million litres of diesel a year.

The minister hopes the B7 programme will further boost crude palm oil (CPO) prices.

The government's decision to implement a zero-rate on export duties for CPO in September has contributed to higher CPO prices after the value of the commodity had been on a downward trend for six months, reaching a five-year low in September.

Prime Minister Datuk Seri Najib Razak had announced in his Budget 2015 speech that the exemption of export duty on CPO will be extended to the end of this year.

Uggah today declined to say if the government has plans to extend the tax exemption into 2015.

"I am confident prices will move higher," he said. "We have to be confident."

CPO is currently trading at about RM2,180 per tonne.