Malaysia will raise biodiesel blending rates as an immediate buffer against global energy volatility, leveraging existing industry capacity for a swift rollout.
PETALING JAYA: Biodiesel will be fast-tracked as Malaysia’s most immediate and practical alternative fuel, with the government moving to raise blending rates as part of efforts to cushion the impact of global energy volatility.
Economy Minister Akmal Nasrullah Mohd Nasir said the National Economic Action Council (MTEN) has agreed in principle that biodiesel is the most ready-to-deploy option in the near term, given its compatibility with existing systems and strong domestic capacity.
He said Putrajaya is prioritising solutions that can be rolled out quickly, deliver direct impact, and leverage current infrastructure.
“Biodiesel meets these requirements because it is an alternative energy source that can help reduce dependence on increasingly uncertain fossil fuel supplies,” he said during a briefing on the global energy crisis.
Akmal Nasrullah said biodiesel’s key advantage lies in its immediate usability, particularly across transport, logistics, agriculture and services sectors, without requiring the development of a new energy ecosystem.
“This means the government does not need to wait before taking action. The current situation shows that the country is in a position to accelerate implementation,” he said.
He pointed out that Malaysia already has substantial unused capacity within its biodiesel industry.
In 2025, production stood at 975,207 metric tonnes, compared with a total capacity of 2.36 million metric tonnes.
“This indicates that the industrial base, supply chain and blending capabilities are already in place and only need to be strengthened in a structured manner to maximise benefits,” he said.
As part of the next phase, the government has agreed to increase the biodiesel blending rate from B10 to B15, starting with a transition to B12.
The move will not involve additional costs and will utilise existing blending infrastructure.
“The implementation of B10 has already demonstrated that the foundation is there,” he said.
He added that higher biodiesel usage is expected to help extend the availability of Malaysia’s diesel supply, supported by a broader biofuel mitigation strategy.
This includes phased upgrades to B20 and B30 depot infrastructure under the 13th Malaysia Plan, as well as preparations for a future B30 mandate for commercial and public transport sectors.
Akmal Nasrullah said the government will also engage with the Oil Industry Technical Committee (OITC) to ensure smooth implementation and industry alignment.
“We will continue to monitor global developments, ensure that energy supply remains sufficient, and accelerate reforms towards a more resilient energy system as a strategic national priority,” he said.
Last week, Felda chairman Datuk Seri Ahmad Shabery Cheek said B100 could emerge as a more competitive and sustainable alternative energy source, particularly given the uncertainties arising from the Middle East conflict.
He added that the rollout, still in the policy stage, will start within the Felda ecosystem, and stressed that a government policy is needed first, as current crude palm oil supplies may not be sufficient for immediate implementation.
