B10 biodiesel programme to increase demand for crude palm oil

He expects the B10 programme to consume about one million tonnes of CPO a year, from 700,000 tonnes under the B7 programme.

KUALA LUMPUR: The implementation of the B10 biodiesel programme by October will boost the domestic usage of crude palm oil (CPO), said Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas.

He expects the B10 programme to consume about one million tonnes of CPO a year, from 700,000 tonnes under the B7 programme.

“We are hoping to conclude the discussion with our stakeholders by the end of this month, because by then I will present the paper to the Cabinet,” Uggah told reporters at the 8th International Planters Conference 2015 yesterday.

The B10 biodiesel programme involves a blending rate of 10% palm methyl ester and 90% diesel.

The Government began implementing the biofuel programme with mix of 5% of palm methyl ester in 2011, as part of efforts to lend support to palm oil prices and boost CPO consumption.

CPO prices traded at RM2,333 per tonne yesterday. “The current improvement in CPO prices is because of the soybean market, biodiesel programme in the Unoted States as well as the determination of Malaysia and Indonesia to continue with its biodiesel mandate,” said Uggah

In April, the local palm oil stocks rose 17.59% to 2.19 million tonnes against 1.87 million tonnes recorded in March.

Meanwhile, on the Malaysian Standard for Sustainable Palm Oil (MSPO), Uggah said that the Government was looking to have dialogue sessions with Roundtable on Sustainable Palm Oil (RSPO) and the Indonesian Sustainable Palm Oil (ISPO) in the near term.

Uggah said the MSPO certification was based on local laws and regulations to address the dilemma of smallholders, who faced difficulty to comply with RSPO standard, as it could be pricey.

“We are providing about RM53mil in financing to help smallholders to help them with the MPSO certification,” he said.

The MSPO is the third such certification standard in the world for palm oil, after the ISPO was launched in 2011, and the multi-stakeholder grouping RSPO set up in 2004.

Uggah is targeting the country’s oil extraction rate (OER) at palm oil mills to improve to 25% in the next five years from 20% currently

Meanwhile, he said that oil palm mills in Sabah were not damaged by the 6.0-magnitude earthquake last Friday.

In a separate statement, BMW Malaysia Sdn Bhd (BMW Malaysia) managing director and chief executive officer Alan Harris said the move to implement B10 biodiesel could result in severely damaged engines, according to worldwide tests conducted on the biodiesel blend by it.

The German automaker said its tests with the B10 biodiesel found that the B10 causes “oil sludge” and “reduced lubricity”, “with the risk of severe engine damage” to vehicles.

Alan called on the ministry to take into account feedback and opinion of the Malaysian automotive industry before forging ahead with the implementation of the B10 mandate.

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