Indonesia & Malaysia moving ahead in South East Asia biodiesel market developments

In a new record, Indonesia has consumed as much as 2 million kiloliters of biodiesel in the period between January and October 2016. The government had introduced biodiesel to stabilize the country’s palm oil prices and also to address climate change.

The total consumption of 2.06 kiloliters in the first 9 months of the year translates to almost the monthly requirement of Indonesia.

However only about 7 percent of the 33 million tons of crude palm oil produced in 2016 was used to make biofuel. The Indonesian government aims to raise this number to 26 percent by 2020. Already the use of biodiesel has helped Indonesia reduce 4.3 million tons of carbon dioxide from its greenhouse gas emissions this year. Indonesia expects to obtain 23 percent of its energy from mixed and renewable sources, including biofuels and raise this percentage to 30 percent by 2050.

The other key South East Asian player – Malaysia is planning to raise the current B7 biodiesel mandate to B10. The biodiesel B10 is a blend of 10 percent palm methyl ester (PME) and 90 percent regular diesel while B7 is of a lower blend of 7 per cent PME.

The new measure will also require the industrial sector to start using the B7 blend. The industrial sector has until now been using regular diesel.

The new mandate is expected to create demand for 800,000 tonnes of palm oil per year to be converted into PME. The initiative is expected to help Malaysia’s palm oil stocks and support palm oil prices in the international market.

The Malaysian government, via the Ministry of Plantation Industries and Commodities and its agency Malaysian Palm Oil Board, has taken a gradual approach in rolling out the B5 and then B7 blends in the country.

The country’s biodiesel producers supply PME to the transport sector, starting June 2011 with the B5 programme. Thereafter, the blending percentage was raised to B7 in November 2014.

More about biodiesel market developments will be discussed at CMT’s 3rd Biomass & BioEnergy Asia on 27 February- 1 March, 2017 in Jakarta.

For more information about the event, contact Ms. Hafizah at hafizah@cmtsp.com.sg or call 65 6346 9218.

Read more:

Indonesia Consumed More Than 2 Million Kiloliters of Biodiesel in 2016

B10 boon set to support palm oil industry