B10 biodiesel rollout 'just a matter of time'

KUALA LUMPUR: The government has reiterated that the introduction of the B10 biodiesel programme remains on course even though its implementation has been pushed back several times.

Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong said the structural price difference between the global oil price and the crude palm oil (CPO) is an important consideration in the implementation of B10.

“We’re promoting it (B10), it’s still on course. We didn’t implement it in December because of the structural price gap between the world oil price and CPO price. When there’s a structural price gap, it can lead to an increase (in costs). It was not deemed feasible at that time and we don’t want to burden consumers,” he told a press conference after opening the Palm and Lauric Oils Price Outlook Conference & Exhibition here yesterday.

Mah said as there are concerns over the usage of B10 in vehicles, the government is conducting a lot more tests and consultations these few months.

“The way ahead is still to implement B10 but now we’re waiting for the correct timeline,” he added without elaborating further.

The ministry, which is maintaining its CPO price forecast at RM2,700-RM2,800 a tonne for 2017, plans more trade visits overseas to expand into new markets and increase exports in existing markets.

“Last year we exported RM67 billion worth of palm oil and palm oil-based products. We hope to touch RM70 billion this year,” Mah said.

Meanwhile, he said, Malaysia is still negotiating with Indonesia on standardising CPO export duties, but did not give any indication on when talks would conclude.

“It’s not going to be easy but we hope to do it with Indonesia because it is the world’s biggest exporter (of palm oil), we’re number two. The requests and demands from Indonesia and Malaysia are different but we hope to harmonise them because as two of the world’s biggest (CPO) exporting countries, we don’t wish to compete, we hope to work together with a standard price structure,” said Mah.

Malaysia has an export duty on CPO (8% for March) while Indonesia has export duties on four types of palm products, with higher duties on raw materials and lower duties on finished products.

Malaysia accounts for 39% of global palm oil production and 44% of global palm oil exports. This year marks a century of commercial oil palm cultivation in Malaysia.

Meanwhile, the government has allocated a RM50 million grant for research and development (R&D) towards enhancing the safety and quality of Malaysia’s palm oil and palm oil-based products.

Mah said the R&D will be carried out with the private sector on a joint-venture basis, where the grant will facilitate stakeholders such as palm oil mills and refineries to do more R&D, in addressing food safety concerns, including the level of contaminant in palm oil.

He said the government will continue to prioritise enhancing the quality and safety of Malaysian palm oil products for consumption, assuring consumers that palm oil and its derivatives are indeed safe for consumption as a food item.

“Palm oil is already safe in terms of nutritional value but we still want to ensure that it reaches a higher level. We want palm oil to be one of the safest and most nutritious oils in the world,” said Mah.

The qualifying criteria for the application of research grant are mills and refineries with majority equity owned by Malaysians and based in Malaysia, with preference to be given to independent mills and refineries; mills licensed by the Malaysian Palm Oil Board and refineries by the Malaysian Investment Development Authority. The funding for capital expenditure is on a matching basis.