Malaysia’s B10 biodiesel thirst drives palm oil growth

Consumption of B10 biodiesel – 10% palm oil based fuel – has gone up remarkably following its introduction in early 2019.

Forecast to reach 940 million litres in 2019, up 42% y-o-y, domestic consumption was higher than exports in the first six months of this year which were 367 million litres, up 35% y-o-y.

There is still strong demand from the EU and China, with exports to these markets estimated at around 750 million litres in 2019. However, the European parliament will cap the use of palm oil at the 2019 level until 2023 and reduce it to zero by 2030.

All palm oil products for the biodiesel industry exported to the EU are now required to be certified sustainable.

Slumping palm oil prices in 2018 and the first half of 2019 led to an upsurge in exports to China where it was made into biofuel. Malaysia plans to introduce biodiesel B20 in 2020.

The Norwegian parliament has voted to exclude palm oil based biodiesel due to concerns over deforestation, effective in 2020.