MALAYSIA has made a notable policy shift by lifting the blanket subsidy for diesel, and the government plans to target gasoline next. While this move could save billions of ringgit, it also presents a perfect opportunity for the government to revisit and enhance the country's biofuel roadmap. By strengthening the biodiesel mandate and introducing a new bioethanol program, Malaysia can expedite the reduction of carbon emissions, in line with the nation’s objective to achieve net-zero carbon emissions by 2050.

Increasing the Biodiesel Mandate

Previously, diesel prices were heavily subsidized, making biodiesel less attractive due to its higher cost. However, the landscape has changed. When produced optimally, biodiesel can be cost-competitive with fossil diesel, which sells for about RM3.35 per liter.

Malaysia has already started a B20 program, requiring diesel for transportation to be blended with 20% palm-based biodiesel. However, the nation is currently still implementing a B10 program. Increasing the biodiesel mandate can leverage cost parity to promote a more sustainable energy mix.

This move would bring two-fold benefits. Firstly, it would stabilize crude palm oil prices by lessening reliance on exports. Secondly, utilizing waste oils like used cooking oil and palm oil mill effluent oil as feedstock would bolster the circular economy.

Biodiesel has a significantly lower carbon intensity than fossil diesel, which helps reduce greenhouse gas emissions. For example, if Malaysia’s diesel consumption for transportation is about 8 billion liters in 2022, an additional 10% biodiesel blend would mean 0.8 billion liters of biodiesel. Given that biodiesel emits roughly 80% less carbon dioxide than fossil diesel, this could result in a reduction of about 1.7 million metric tons of carbon dioxide annually—a substantial decrease that would contribute significantly to mitigating climate change and achieving both national and global sustainability goals.

Complementing EV Adoption with Bioethanol

While Malaysia rightly focuses on adopting electric vehicles (EVs), it's essential to recognize that EVs may not solve all transportation challenges. Limited charging infrastructure poses significant barriers to widespread EV adoption, especially for residents of high-rise buildings like condominiums where installing personal charging stations is difficult and expensive. Additionally, the high cost of EVs is a major deterrent for many potential buyers.

Given these constraints, a hybrid approach that includes a bioethanol mandate alongside the promotion of EVs would be more practical. Many countries have successfully implemented bioethanol programs. For instance, Thailand has effectively deployed a bioethanol mandate, blending bioethanol with gasoline to reduce emissions and reliance on fossil fuels.

Brazil’s Raízen is another example, demonstrating that it is technically and commercially viable to produce bioethanol. This global leader in biofuel has already sold one billion liters of bioethanol produced from biomass.

Adopting a similar strategy in Malaysia could yield immediate environmental benefits while the country continues to develop the infrastructure necessary for widespread EV adoption. This is especially true when bioethanol produced from agricultural biomass, such as oil palm empty fruit bunches and rice husks, can reduce greenhouse gas emissions by over 80% compared to gasoline.

A robust bioethanol mandate aligns with Malaysia’s goals of promoting a circular economy. By converting waste materials into energy, Malaysia can reduce its dependence on high carbon-intensity fossil fuels and create a sustainable loop of production and consumption. This approach not only fosters economic resilience but also supports environmental stewardship.

Revisiting the Biofuel Roadmap for a Net-Zero Transition

It’s time for the government to revisit Malaysia’s biofuel roadmap, given its crucial role in the transition to net-zero emissions by 2050. Compared to biodiesel, bioethanol is relatively new in the country, so government funding support is essential. While Foreign Direct Investment remains favoured for new business models, as evidenced by the government's heightened focus on EVs, redirecting some of the subsidy savings towards funding the inaugural greenfield bioethanol plant would demonstrate the initiative's feasibility and significantly bolster the country's transition to net-zero emissions.

By taking these steps, Malaysia can enhance its energy security, promote sustainable development, and make significant contributions to global climate change mitigation efforts. An enhanced biofuel roadmap, with increased biodiesel mandates and a robust bioethanol program, offers a pathway to a greener, more sustainable future for Malaysia. Will the MADANI government seriously consider these proposals?


* Eur Ing Hong Wai Onn, a chartered engineer and chartered environmentalist, is a Fellow of the Institution of Chemical Engineers, the Royal Society of Chemistry, and the Malaysian Institute of Management. He is also the author of “A Chemical Engineer in the Palm Oil Milling Industry”.

** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.