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Malaysia’s biodiesel mandate ‘almost a disgrace’, says leading palm oil analyst

Malaysia’s biodiesel mandate ‘almost a disgrace’, says leading palm oil analyst
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KUALA LUMPUR (March 24): Describing Malaysia’s biodiesel mandate as “almost a disgrace”, leading palm oil analyst Dorab Mistry said the government is not “doing anything” to promote biodiesel. 

“I am afraid that (Malaysia’s) implementation of biodiesel is almost a disgrace. There are individual areas where Malaysia has done brilliantly, and I am a great admirer of Malaysia.

“But on the implementation of biodiesel, you are riding on the back of Indonesia. You are not doing anything to promote biodiesel, which is a sad fact,” Mistry said during a question and answer session at the virtual Palm and Lauric Oils Price Outlook Conference today.

Malaysia’s B20 (biofuel with a 20% palm oil component) mandate for the transport sector has been delayed to December 2021 in Peninsular Malaysia. The mandate has been implemented in Sarawak since September 2020 and is scheduled to be rolled out in Sabah in June 2021. 

Indonesia, meanwhile, has implemented a B30 biodiesel mandate, and plans to raise it to B40 soon.

Mistry, director of Godrej International Ltd, praised Putrajaya for zero-rating export duties on crude palm oil (CPO) last year. 

 “The Malaysian government does sensible things from time to time, and I spent the whole of last year complementing Malaysia. I know that this decision was by your prime minister personally to completely exempt palm oil from all export taxes last year, and that was a masterstroke.

“At one sweep, he took away the export market from Indonesia and Malaysia became a thriving exporter,” said Dorab, noting that prices of CPO futures contracts on Bursa Malaysia Derivatives are dictated by Malaysian palm oil stocks.

Mistry also expects Malaysia to “do the sensible thing” by bringing in foreign workers in June or July to alleviate the labour shortage in the country’s plantation sector.

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S Kanagaraju