15/04/2026 (Oils & Fats International) - With surging crude oil prices driven by the conflict in Iran and the closure of the Strait of Hormuz, the Malaysian government is planning to introduce a phased expansion of its 20% palm oil-based biodiesel (B20) programme nationwide, according to a Reuters report quoting Plantation and Commodities Minister Noraini Ahmad.

As the world’s second largest producer of palm oil, Malaysia currently applies a B10 biodiesel mandate for the transport sector, with B20 in place in the states of Labuan, Langkawi and most of Sarawak.

However, recent surges in crude oil prices had renewed calls for the government to accelerate the shift towards higher biodiesel blends, the 7 April report said.

In response to questions from Reuters, Ahmad said the ​government remained committed to implementing initiatives to progressively increase biodiesel blend usage over time.

“Currently, most areas in Malaysia are still on a B10 blend for the transportation sector,” she said.

“Therefore, there ​is still significant room to support an increase in the national biodiesel ​blend from B10 to B20 and B30.”

Top palm oil producer Indonesia implemented its mandatory B40 ‌biodiesel ⁠programme and was looking to begin the introduction of B50 in July, the report said.

Previous increases in Indonesian domestic blending mandates had created global supply tightness, making palm oil more expensive than rival oils, Reuters wrote.

Malaysian biodiesel production totalled 975,207 tonnes in 2025, meaning biodiesel production ​plants were operating ​well below their ⁠maximum production capacity of 2.36M tonnes, Ahmad said.

As part of the drive to increase biodiesel mandates, blending depot infrastructure across the country should be prioritised ​for upgrading, she added.

Under a five-year programme, allocations have been ​approved to ⁠upgrade biodiesel blending depot facilities to B20/B30 in areas including Sandakan, Tawau, Sepanggar and Bintulu to support low-carbon alternative fuel usage.

“This biodiesel ⁠blending depot ​upgrade project will be implemented in phases to ​allow infrastructure improvements to be carried out in a planned and effective manner, in line with ​the country's current financial situation,” Noraini said.

https://www.ofimagazine.com/news/malaysia-plans-phased-expansion-of-biodiesel-programme