KUALA LUMPUR: The Malaysian Biodiesel Association (MBA) has urged the government to follow proactive measures taken by other Asean counterparts and expedite the nationwide implementation of higher biodiesel blends under the national biodiesel programme for both the transport and industrial sectors.
The association said the move was critical amid ongoing geopolitical tensions in the Middle East that have disrupted key shipping routes and oil production, placing global fuel supply chains under severe strain.
“The current global situation underscores that this is no longer a matter of policy preference, but one of national strategic importance,” it said in a statement on Tuesday (April 7).
MBA said, noting that higher global fuel prices were already having direct implications on Malaysia’s domestic fuel costs, inflation and overall economic stability.
The association pointed out that neighbouring countries have taken swift action to strengthen energy security.
"Indonesia has raised its biodiesel blend from B40 to B50, while Thailand has increased its blend from B5 to B7 and expanded the availability of B20 as an alternative option.
“These actions are aimed at lowering consumer fuel costs, supporting farmers and strengthening national energy security during periods of global supply disruptions,” it said.
In Malaysia, the B20 biodiesel programme for the transport sector was launched in February 2020, but implementation has been limited to Langkawi, Labuan and Sarawak.
The industrial sector, meanwhile, continues to adopt the B7 blend.
“Nearly six years on, nationwide rollout has yet to be realised,” MBA said.
The association called for immediate implementation of higher biodiesel blends, particularly in locations where blending infrastructure is already technically capable.
“For areas with existing capacity, higher biodiesel blending levels between B10 and B20 should be implemented immediately,” it said.
At the same time, MBA acknowledged that progress has been constrained by infrastructure readiness, but stressed the need for accelerated upgrades to enable blending levels of up to B30 nationwide.
The association also proposed fiscal measures to encourage wider adoption of biodiesel, including exempting the 10% sales tax on biodiesel used outside the national blending programme.
“Leveraging Malaysia’s strength as a leading palm oil producer, the combined impact of the national biodiesel programme and voluntary biodiesel use would enhance energy security, lower greenhouse gas emissions and reduce exposure to global oil price shocks,” it said.
MBA added that such measures would also contribute to foreign exchange savings, improve fiscal resilience and continue supporting the domestic palm oil sector and rural livelihoods.
Looking ahead, the association urged that its position be reflected in the upcoming review of the National Biofuel Policy, supported by a clear and well-articulated long-term biodiesel strategy.
“A clearer policy direction will provide much-needed certainty to industry stakeholders, investors and consumers alike,” it said.
MBA also noted that the impending implementation of a carbon tax mechanism in Malaysia should further justify the adoption of higher biodiesel blends across both sectors.
“The current crisis presents not just risks, but an opportunity for Malaysia to reinforce its commitment to sustainable, domestically anchored energy solutions,” it said, adding that it stands ready to work with the Government and stakeholders to advance the agenda.
