The announcement by the Deputy Prime Minister (DPM), YAB Datuk Seri Dr Ahmad Zahid Hamidi, regarding biodiesel production to address the crisis of diesel shortages and rising prices is highly encouraging.
However, the DPM’s statement dated 19 April 2026 is not consistent with the actual facts of biodiesel supply and usage in Malaysia. In his statement, he mentioned that:
a) “Currently, there are 19 ‘biofuel’ production plants ranging from grades B15 to B50.”
b) “These 19 biodiesel production plants nationwide are expected to supply 1.5 million liters of biodiesel per month.”
c) “We will use sludge or by-products derived from crude palm oil (CPO), where 35 percent of this sludge will be fully utilized for biodiesel production as well as Jet A1 fuel.”
The figures and facts presented in the DPM’s statement do not align with the actual state of biodiesel production.
1. There are 34 biodiesel blending depots across Malaysia producing B10 and B20. These petroleum blending depots receive biodiesel supply from 19 operational biodiesel plants nationwide. Biodiesel plants produce biodiesel or B100 (100% biodiesel) using palm oil as the raw material, whereas petroleum blending depots blend biodiesel with diesel according to specified ratios such as B10 (10% biodiesel) and B15 (15% biodiesel).
2. Existing blending depots are not capable of producing biodiesel blends up to B50 due to insufficient blending infrastructure, such as biodiesel storage tanks. Currently, biodiesel depots in Langkawi, Labuan, and throughout Sarawak (except Bintulu) are only able to produce B20. The government needs to upgrade biodiesel depots in many locations in Peninsular Malaysia, Bintulu, and Sabah to enable supply of B20 and above to all users.
3. The estimated biodiesel consumption in the Malaysian market ranges between 750,000 to 850,000 tonnes per year, or nearly 1 billion liters annually. This means that biodiesel supply and usage amount to approximately 75 to 85 million liters per month, not 1.5 million liters per month as stated in TPM’s statement.
4. The use of sludge oil for biodiesel production is not suitable but may be used for Jet A1 fuel production because:
i) The quantity of sludge oil is insufficient for B15 to B50 production. The production of palm sludge oil in Malaysia is inconsistent as it is a by-product of palm oil mills. Its output is only in the range of tens of thousands to hundreds of thousands of tonnes annually.
ii) Most biodiesel plants are unable to process sludge oil due to technological limitations and its high free fatty acid (FFA) content and impurities. As a result, biodiesel yield from sludge oil is 10–15% lower compared to biodiesel produced from palm oil. Only about 15% of the 18 plants are capable of processing sludge into biodiesel.
iii) Exporting sludge oil is more profitable than using it for the domestic market.
I hope that MTEN and the Government’s media office will engage with industry players so that the Government can obtain accurate figures and facts regarding biodiesel supply and usage in Malaysia. This is crucial to ensure that the Government does not make errors in calculating the development budget for biodiesel depots in our country.
Teresa Kok