1. The Ministry of Plantation Industries and Commodities (MPIC) assured the Malaysian Biodiesel Association (MBA) that the Ministry is all ears to the group’s proposal that Malaysia should retain its existing biodiesel mandate after all.

2. MBA highlighted why Malaysia should not reduce or stop its biodiesel mandate as the biodiesel industry hardly consumes 1 million tonnes of palm oil annually as opposed to over 40 million tonnes used globally. In expressing its views, the MBA had mentioned that any knee-jerk reaction to banning biofuels derived from vegetable oils would cause havoc in the global vegetable oil market.

3. Nevertheless, it has to be highlighted that the concerns came at a ‘chaotic moment’ where MBA was reacting to a viewpoint by the Malaysian Palm Oil Board (MPOB) a day earlier – on April 25, being precise – that both palm oil exporting and importing countries should set their priorities right by “temporarily re-considering food versus fuel priorities.”

4. Recall that there was an air of desperation back then – Malaysia’s neighbor and the world’s largest palm oil exporter, Indonesia, was on the verge of putting to a halt its shipments of refined, bleached, and deodorized (RBD) palm olein. This prompted MPOB’s director-general Datuk Dr. Ahmad Parveez Ghulam Kadir –an all-around palm oil expert– to convey such views against the
backdrop of a choke in global edible oil supplies amid both adverse weather conditions and the Russia-Ukraine conflict.

5. Needless to say that disruptions from the geopolitical tension have exacerbated price rises in food commodities which were already running at 10-year highs in the Food and Agriculture Organization's (FAO) index – threatening not only a jump in global malnourishment but a spike in global inflation across both developed, developing and under-developed economies.

6. True enough, Indonesia declared an export ban on April 28 on cooking oil and its raw material (which lasted until May 23) in the quest to make cooking oil available at affordable prices for its citizens.

7. But now that normalcy has resumed and calmer heads have prevailed, MPIC wishes to state that it is all status quo on Malaysia’s biodiesel mandate front. On the same note, MPIC wants to take the opportunity to reiterate that Malaysia’s National Biofuels Policy (NBP) which was rolled out in March 2006, remains committed:

 To reduce the greenhouse gas (GHG) emissions rate in line with the
country’s aspiration towards achieving the GHG emissions reduction
target of 45% of GDP by 2030.
 To expand the use of downstream palm oil products and become an
initiative to increase the income of oil palm smallholders through palm
oil market price control mechanisms.
 To help reduce the country's dependence on fossil fuels as one of the
energy security initiatives.

8. To MBA, we thank them for their invaluable feedback on our big role and the effect of the biofuel policy towards conserving nature for younger generation Malaysians. We welcome all constructive criticism or views that can enable both sides of the divide – authorities or industry players – to derive a win-win situation.

2 JUNE 2022