Indonesia, Malaysia commit to biodiesel mandates despite higher prices

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Top palm oil producers Indonesia and Malaysia remain committed to their mandatory biodiesel programmes despite higher prices of the feedstock to reach green energy goals, senior officials said on Thursday.

Indonesia and Malaysia use palm oil as blending for biodiesel, with Indonesia since early 2020 using a mandatory B30 - a biodiesel containing 30% of palm-based fuel - the highest mandatory mix in the world, to slash imports of diesel fuel.

Indonesia is currently running test flights using jet fuel mixed with palm oil and conducting various trials to use it to produce other fuels, as well as planning road tests on a 40% palm-based biocontent. Rival Malaysia is also committed to maintaining and expanding its own biodiesel programme after pandemic-related delays, its Plantation Industries and Commodities minister, Zuraida Kamaruddin, said at the same event.

Malaysia's palm oil benchmark has gained about 30% so far this year amid sluggish output from the two top producers, Indonesia's earlier export restrictions and impacts of the war in Ukraine.

 

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