National Biofuel Policy of Malaysia (NBP 2006)

The National Biofuel Policy (NBP 2006) was drafted in 2005 but entered into force only in 2006. The NBP 2006 is the main policy underpinning the Malaysian biodiesel industry. The policy focuses on the commercialisation, usage, research, technology and export of biodiesel but does not include upstream aspects of sector development.

The NBP was structured in 5 strategic thrusts biofuels for transport, industry, technologies, export and for a cleaner environment. 

The implementation of the NBP 2006 was divided into three categories: 

Short term:

• Estabklish Malaysian standard specifications for B5 diesel;
• Participation in B5 diesel trials by selected government departments with their fleets of diesel vehicles;
• Establish B5 diesel pumps for the public at selected stations;
• Voluntary trials on B5 diesel by the Malaysian Palm Oil Board (MPOB) for selected users in the industrial sector;
• Promotional awareness programme to educate the public on the use of B5 diesel;

Medium term:

• Establish Malaysian standard specifications for palm oil-based methyl ester biofuel for domestic use and export;
• Engine manufacturers to extend their warranties to the use of B5 diesel. Extensive B5 diesel testing shall be carried out to facilitate the granting of such engine warranties;
• Pass and enforce legislation to mandate the use of B5 diesel;
• Encourage establishment of commercial methyl ester plants. The MPOB will act as a catalyst by pioneering the establishment of palm biodiesel plants in Malaysia in collaboration with the private sector;

Long term:

• Gradual increase in proportion of processed palm oil in the diesel blend;
• Greater uptake of biofuels technology by Malaysian companies and foreign companies abroad.