Malaysia has begun rolling out its biodiesel blending mandate, which was launched in the federal administrative capital of Putra Jaya on June 1.
The mandate, requiring diesel to contain 5% biodiesel, was officially declared effective by the Malaysian Minister for Plantation Industries and Primary Commodities Bernard Dompok.
The move was welcomed by Australia-based biodiesel company Mission NewEnergy, which has the largest capacity to produce the product in Malaysia.
The mandate is being implemented in Malaysia's central region initially, with Putra Jaya to be followed by Malacca on July 1, Negeri Sembilan on August 1, Kuala Lumpur on September 1 and Selangor on October 1. The government, through its Malaysian Palm Oil Board, has allocated Malaysian Ringgit 43.1 million ($14.3 million) to finance the development of in-line blending facilities at six petroleum depots in the region owned by Petronas, Shell, Esso, Chevron and Boustead Petroleum Marketing.
Mission NewEnergy said the government had fixed the supply price of biodiesel to the oil companies linked to the monthly average refined, bleached and deodorized palm oil price. The price of B5 at the pump is expected to be similar to the price of normal diesel, which is currently MR1.80/liter, the company added.
Full compliance in the central region is expected to result in total biodiesel demand of 200,000 mt/year, rising to 500,000 mt/year once the mandate is 100% implemented on a national scale, according to Mission NewEnergy.
The company is "well-poised to supply the B5 requirements," Mission NewEnergy's group CEO Nathan Mahalingam said in a statement last week. "We are finalizing documentation and logistics with industry participants and anticipate that we will be commencing supplies in July 2011."
Mission NewEnergy has the capacity to produce more than 2.6 million barrels/year of biodiesel at its refineries in Malaysia's Kuantan Port.
