Automotive & Transportation


Malaysian Biodiesel Mandate

A Controversial Mandate to Protect the Malaysian Palm Oil Industry
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Published: 6 Dec 2018

This study offers a detailed overview of the biodiesel mandate in Malaysia and the steps taken by the Malaysian government to protect the Malaysian palm oil industry. Palm oil is a key ingredient in the biodiesel produced in Malaysia. Biodiesel is the main kind of biofuel used in the country. This research service gives an understanding of the factors leading to the B10 mandate in Malaysia. It analyses the strategically important factors, market trends, regulatory trends, and the impact of the same on the automotive sector. Factors such as strong government support, excellent R&D facilities, a large number of plantation estates, low crude palm oil market price and a global commitment to use renewable and sustainable sources of energy are the key market drivers for the growth of the biofuel market. However, for sustained growth, the industry must overcome certain challenges and restraints such as the EU Renewable Energy Directive (RED) that restricts the import of palm oil from Malaysia from 2021, biodiesel chemical incompatibility with diesel engine, labor shortage at plantation estates, and inconsistencies in weather. In 2006 the Malaysian government launched the National Biofuel Policy (NBP) as an initiative to further spur the biofuel market.

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