PUTRAJAYA: The new B15 biodiesel blend for the transportation sector will be implemented nationwide starting June 1, 2026, and is forecast to consume about 801,000 tonnes of crude palm oil (CPO) annually, or about 4% of total CPO production.

The B10 blend for the sector currently consumes about 534,000 tonnes of CPO and the government’s aim is to get the blend rate to 30% by 2030.

This is according to the Plantation and Commodities Ministry.

“The implementation of B15 is a strategic step by the government in strengthening the country’s energy security by reducing dependence on imported fossil diesel, while promoting the use of more sustainable and environmental-friendly alternative energy sources,” Plantation and Commodities Minister Datuk Seri Dr Noraini Ahmad said in a briefing yesterday.

She added that there are currently 34 blending depots across the country to support the rollout.

The minister said the government has also approved an allocation of RM42mil for the first phase of facility upgrades towards the implementation of B20 in Sarawak.

For the second phase, the ministry is requesting an additional allocation of about RM56mil to upgrade distribution terminals, particularly in the Klang Valley Distribution Terminal area, she said.

The blending assets will be owned by the Malaysian Palm Oil Board and operated by oil companies with retail operations.

Total biodiesel production in the country from CPO-derived palm methyl ester (PME) and other sources is estimated at close to one million tonnes annually, while total PME production capacity is estimated at 2.65 million tonnes annually.

A B20 blend biodiesel for the transportation sector is available in Labuan, Langkawi and Sarawak.

For the industrial sector, the biodiesel bland rate stands at 7% or B7.

Notably, Indonesia wants to raise its biodiesel bend rate to 50% to lower its dependency on fossil fuels.

Industry expert Joseph Tek said the higher blend rates provide support to CPO prices and farmer incomes.

“CPO prices are no longer being held up by sentiment alone. The support looks more structural now.

“Supply growth has slowed, new oil palm expansion is harder, yields from other oil crops are not improving fast enough, while demand for edible oils continues to rise.

“The biodiesel factor adds another important layer.

“When crude oil strengthens, biodiesel becomes more attractive, especially for countries looking at energy security, import substitution and rural income,” he told StarBiz.

He added that the push from B40 towards B50 in Indonesia and Malaysia’s move from B10 towards B15 were not small footnotes.

They create real additional pull on palm oil demand and are also why CPO in the RM4,000 to RM4,500 a tonne price range may stay firmer for longer than many expect, he forecast.

“But food inflation, subsidy costs, policy intervention and affordability will always act as brakes.

“The plate and the tank do not always dine peacefully together,” he noted.