KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) Malaysia's higher biodiesel consumption would reduce crude palm oil (CPO) dumping and help stabilise prices for the long-term.
Effective 1st June 2016, Malaysia had raised the biodiesel mandate for the transport sector from B7 to B10, in addition to introducing the B7 biodiesel programme for the industrial sector.
This means the government will increase the blending of palm methyl ester from seven per cent (B7) to 10 per cent (B10) with 90 per cent petroleum diesel for the transport sector while the industrial sector will adopt a seven per cent mandate for palm methyl ester or B7.
Both the B10 and B7 mandates will collectively use up 709,000 tonnes of CPO per year, across Malaysia.
“With this rollout, FGV is expecting a minimum 40 per cent increase in the local biodiesel demand,” FGV group president and chief executive officer Datuk Zakaria Arshad said in a statement.
Zakaria noted that the government’s decision to introduce the usage of biodiesel B7 to the industrial sector and upgrading from B7 to B10 for the transportation sector is seen as a “catalyst for the revival of the nation’s biodiesel industry”.
“Currently, the biodiesel industry is not competitive due to the relatively low price of world crude oil and dependency on government mandate to increase its demand," he said.
Since 2015, FGV has implemented the consumption of B30 for internal usage in its fleet of tankers to test the potential of biodiesel as a sustainable fuel alternative to regular diesel. As at noon, the third month benchmark CPO futures on Bursa Malaysia Derivatives Exchange traded at RM2,660 per tonne.
FGV (5222) - FGV: High biodiesel consumption could help stabilise crude palm oil prices