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November 22, 2016

Volume 7 Issue 4

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Palm Oil Prices Cause Malaysia to Balk at B10

Citing rising crude palm oil prices, Malaysia again postponed implementation of the B10 biodiesel program in its transportation sector and B7 in its industrial sector – this time indefinitely.

The country’s Ministry of Plantation Industries and Commodities announced last week that it was uncertain now when it would adopt the mandates, which would restrict the sale of diesel oils to blends containing a minimum quantity of bio-derived material – such as at least 10 percent of palm methyl ester in the case of B10.

“After a thorough study, taking into consideration the difference between crude palm oil and diesel prices [in the] current volatile market, I would like to announce that the implementation of biodiesel mandate for B10 in the transportation sector and B7 in the industrial sector will be deferred to a later date,” said Mah Siew Keong, minister of plantation industries and commodities, in a Nov. 15 statement.

Malaysia had postponed its June 1 adoption of B10 to the fourth quarter of the year in light of some international and domestic automakers’ concerns that biofuels may be incompatible with some engines’ filtration and lubrication systems and that these problems could void engine warranties.

At that time, manufacturers claimed that fuel blends containing more than 7 percent of bio-derived material could accumulate in engine oil sumps and clog filters, hampering lubricant performance. Although similar programs are adopted worldwide, the Malaysia Automotive Institute said that it wanted to see a common testing platform before implementation, as varying geographical conditions affect biofuels’ performance differently.

The ministry’s statement last week did not establish a new timeline regarding when it might adopt the programs. “Although significant effort has been put into [B10] implementation, the government is committed to ensuring that there is no burden of extra costs to [Malaysian citizens] at this time.”

Photo: Getty Images / kerdkanno

Due to rising crude palm oil prices, Malaysia again postponed its B10 biodiesel program.