POINTERS 2014 MPOC
Palm Oil Internet Seminar
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Section 2 : Trade Issues and Market Prospects:
The Malaysian Biodiesel Mandate: The Journey Thus Far
By: Mr. Long Tian Ching

Long Tian Ching is a Director of Vance Bioenergy Sdn. Bhd (www.vancebioenergy.com). Vance Bioenergy is a leading ISO 9001-certified producer of fatty acid methyl ester (Vance Biodiesel), pharmaceutical-grade refined glycerine (Vance Refined Glycerine) and other oleochemicals for use in many industries. Prior to this, Mr Long was an investment banking Vice President at Lazard where he specialized in M&A and managed more than US$5 billion worth of completed transactions across Asia. Mr Long has an MBA in Entrepreneurial Management from the Wharton School, where he graduated as a Palmer Scholar. He also has two undergraduate degrees from the University of Pennsylvania and is a Charted Financial Analyst.
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The Persatuan Biodiesel Malaysia or the Malaysian Biodiesel Association (MBA) was established on September 2, 2008 and consists of members located in Peninsular Malaysia, Sabah and Sarawak. The MBA represents the interests of the biodiesel industry in Malaysia. It’s Vision is: "To establish a sustainable, environment-friendly and economically-viable biodiesel industry in Malaysia and Globally."

Biodiesel use is a global phenomenon and the world consumes some 25 million MT of biodiesel annually. Europe and the US leads the way in biodiesel consumption through their respective enabling legislations: the Renewable Energy Directive (RED) and the Renewable Fuel Standard (RFS) - both of which mandates a certain quantity of biofuel use.

Malaysia has come a long way on its own biodiesel journey – from the initiation of the palm biodiesel research project by the MPOB in 1981 to the construction of the first commercial palm biodiesel pilot plant in 2000 to the enabling legislation for the ongoing Malaysian biodiesel mandate enacted in 2007 and coming into force in 2008. The Malaysian mandate was started in 2011 and the systematic rollout of a nationwide B5 mandate has evolved into the current B7 mandate and soon to be implemented B10 mandate.

This paper shall detail the journey thus far for the Malaysian Biodiesel Mandate and discusses its inception, development, challenges, implementation, impact and achievements to date. It will also discuss how the successful implementation of the biodiesel mandate has put Malaysia on the global map as a leading authority on the effective and successive use of Palm Biodiesel in promoting energy security, a greener environment and social and economic growth for the country.


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Questions & Answers (1) :
Anna
7 years ago
TQ. Your paper shows that the national biofuel policy do encompass Malaysia’s transport, industry, technology and export sector involvement. While Indonesia’s biofuel policy has set target for sectorial biofuel demand, we have not heard of similar plans in Malaysia. My question is what has been done in Malaysia thus to create the link between biofuel industry growth and the identified industry. For my research purpose, I would also like to know whether is it true that the profitability of the biodiesel operation does not depend on biodiesel sale. I was told that the profitability actually comes from tocotrienol sales.
Long Tian Ching:
Malaysia\'s progress on biodiesel implementation has been gradual, step-wise, systematic and highly consultative. As such, its roadmap has not been as ambitious as Indonesia\'s. As you can see, the progress from B5 to B7 and now to B10 has taken a number of years, and much discussion and work amongst the various stakeholders. There are future plans for B15 and B20 and it is expected that biodiesel consumption would increase concomitantly with the higher blends as they are rolled out. Only a small fraction of the Malaysian biodiesel industry is involved in tocotrienols and biodiesel simultaneously. The specific supply and demand dynamics of both products are separate and distinct. In a nuts, profitability of biodiesel is not much influenced by tocotrienols sales unless you have a business model that is specifically balanced to handle both these products. Most successful biodiesel companies make money on biodiesel alone.
7 years ago
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