Malaysia: National Biofuel Policy

Implementation of the National Biofuel Policy will be spearheaded by the Minister of Plantation Industries and Commodities. Towards this end, specific legislation on biofuels will be enacted. This initiative is in line with nation’s Five-Fuel Diversification Policy, a national policy to promote renewable energy (RE) as the fifth fuel along with fossil fuels and hydropower. As a start, the Government is promoting a 5%-mix of processed palm oil with petroleum diesel (B5 diesel) by applying to a fleet of government vehicles on a trial
basis and by establishing B5 diesel pumps at selected stations. The standard for the biodiesel is being developed and a new legislation to mandate the use of B5 diesel will be tabled in Parliament. Government stopped issuing new licensing as of July 2006 – and the total capacity has reached 3,000,000 tons/year, which is six times larger than the projected biodiesel demand for the domestic transportation sector. In terms of promotion of RE and energy efficiency in general, the Government provides various tax incentives for new investments, such as 100% tax exemption for pioneer status business models for a 10-year period and 60% tax allowance on capital expenditure for improving energy conservation. The Government also announced that all Government agencies will be required to target a 10% savings in energy consumption for 2006, which will provide another incentive for energy savings.

Date Implemented: 2006

Status: In Force; Framework Policy

References: http://www.palmoil.com/index.php?q=D1VTW1tASgIEAhEbVg9RAgsIBw==