Kuala Lumpur: Malaysia is exploring a shift towards fully palm oil-based biodiesel, with Federal Land Development Authority (Felda) piloting B100 fuel as a possible lower-cost alternative to conventional diesel.
Industry officials said the proposed B100 fuel, made entirely from palm oil, could be priced below RM5 per litre at the factory level, significantly cheaper than current diesel prices, which are close to RM7 per litre, New Straits Times reported.
According to Malaysian Palm Oil Board Director General Datuk Ahmad Parveez Ghulam Kadir, the use of locally produced palm oil can reduce reliance on imported fuel while supporting incomes of smallholders and settlers.
He said the pricing advantage gives B100 strong potential to compete with diesel, especially when supported by Malaysia’s domestic palm oil supply, though global crude palm oil prices could influence costs.
Felda has been testing the fuel through pilot projects involving vehicles for over 15 months. The initiative is currently limited in scope and has not yet been introduced nationwide.
Malaysia already runs a biodiesel programme under its national biofuel policy, with a B10 mandate requiring diesel to contain about 10 per cent palm-based biodiesel. Higher blends such as B20 are in use in selected areas, including Labuan, Langkawi and parts of Sarawak.
Officials said the immediate impact on consumers is expected to be limited, as B100 use remains confined to controlled operations. However, a wider rollout could increase demand for crude palm oil and put upward pressure on prices over time.
Harald Sippel of ESG Malaysia said the initiative could strengthen energy security and reduce the government’s fuel subsidy burden, which currently stands at around RM6 billion per month.
At the same time, he cautioned that large-scale adoption could affect cooking oil prices if palm oil supply tightens, citing similar developments in Indonesia.
Felda Chairman Ahmad Shabery Cheek said the B100 plan remains at the policy stage and will initially be implemented within the Felda system. He added that the move could offer a more stable and sustainable energy option amid global fuel price uncertainties.
