Malaysia is expected to roll out the biodiesel 10% blend (B10) programme nationwide by July next year upon full agreement among the parties involved with the B5 biodiesel programme, said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok.
“We expect about one million tonnes of crude palm oil (CPO) per year will be taken out from our current high stockpiles from the B10 programme,” he said.
As at end December 2012,Malaysia's CPO inventory hit a record at 2.63 million tonnes.
The B10 (a mixture of 10% palm biodiesel with 90% petroleum diesel) biodiesel programme by the Malaysian Palm Oil Board (MPOB) for the ministry's vehicles was officially launched by Dompok yesterday. He said all 81 vehicles owned by the Plantation Industries and Commodities Ministry and its agencies operating in Selangor and Kuala Lumpur with diesel engines, will be using the B10 biodiesel blend and expected to utilise 25 tonnes of palm biodiesel annually.
The Government has budgeted RM300mil for the building of the biodiesel blending facilities nationwide, he said adding that to date,about RM80mil was spent to build the blending facilities and in the biodiesel subsidies.
To support the programme, the ministry has been working closely with SIRIM Bhd and the Department of Standards Malaysia on the new B10 standard, a migration from the existing B5 biodiesel programme.
According to an MPOB representative, the new B10 biodiesel programme standard is expected to be out by next month. Meanwhile, the B5 biodiesel programme will also be fully implemented nationwide by mid-2014, of which the blending facilities is expected to be fully develop and would enable to cut at least 500,000 tonnes of palm oil inventory per year,” Dompok told reporters after the B10 launch.
“Once we have fully implemented the B10 programme, the B5 programme will then be phase out,” he said.To date, five big players namely Petronas, Shell, Chevron, Petron and BHP have provided the B5 biodiesel in 1,150 petrol stations with a usage of 110,000 tonnes per year.
“We are expecting an additional 500,00 tonnes of biodiesel usage next year when the B5 is fully implemented nationwide,” he added.
The B5 programme was introduced in November 2011 in Putrajaya, Malacca, Negeri Sembilan, Kuala Lumpur and Selangor.
In conjunction with the launching, Dompok said the government was planning to use biodiesel 40% blend from olein palm oil with 60% diesel petroleum for a power plant in Sandakan, Sabah within two years period starting from March this year and expected to use about 54,000 tonnes palm olein per year.
CIMB Research said B10 programme would include top five largest planters in the country to use the biodiesel for their vehicles.
According to AmResearch, if the B10 to be rolled-out nationwide, it will only use 5% of the country estimated CPO production of 18.9 million tonnes for 2012 forecasted.
It is expected that there would be no significant impact on the implementation of the biodiesel programme, but the slowdown in palm oil production would help to reduce the palm oil inventory.