Malaysia expected to produce 800,000 to 900,000 tonnes of biodiesel in 2017

Malaysia is expected to produce between 800,000 and 900,000 tonnes of biodiesel in 2017 from 500,000 tonnes last year when the government implements the biodiesel mandate, said the Malaysian Biodiesel Association.

Its President, U.R Unnithan said the B10 mandate implementation is expected to start anytime this year.

The biodiesel B10 is a blend of 10 per cent palm methyl ester (PME) and 90 per cent regular diesel, while B7 is of a lower blend of seven per cent PME.

Unnithan said likewise, the Indonesian output would rise to 3.5 million tonnes in 2017 from three million tonnes in 2016.

He was speaking to reporters on the sidelines of the Global Palm and Lauric Oils Conference after presenting his paper entitled 'Biodiesel Outlook in a changed global landscape' here Tuesday.

Organised by Bursa Malaysia, the two-day event attracts about 2,000 participants from over 59 countries.

Unnithan said Malaysia produced 500,000 tonnes of biodiesel last year, which were 173,000 tonnes lower than in 2015.

He believes that the government would implement the B10 biodiesel on the back of a subdued palm oil market and better parity than oil.

"But if B10 (mandate) is not implemented, biodiesel production would hover around 500,000 tonnes or 600,000 tonnes," he added.

He said when the association got the industry off the ground, 52 licences to operate biodiesel plants were issued by the government, but only about 20 companies took the challenge to build them.

But the number of active licence holders has since declined to 17 companies, he added.

In a weak export market, a lot of capacity went unutilised, he said, adding that the capacity utilisation at the current level was under 25 per cent or close to 20 per cent.

"If the capacity could be ramped up to near 100 per cent, then yes, they would (help) cover (the cost) and make some profit," he said.

- BERNAMA