Segi Enam Advisors principal Khor Yu Leng was invited onto BFM's Morning Run with Wong Shou Ning and Keith Kam (26 February) to discuss Malaysia’s latest B10 programme, a mandate that requires 10% of palm oil to be blended with diesel fuel for the transportation sector, against the backdrop of the recent B20 programme, now in its pilot phase in Labuan, Langkawi and Sarawak (except for Bintulu). This comes as Indonesia gears up to implement its B40 programme.

In the interview, Yu Leng spoke about sectoral issues experienced within Malaysia that has hindered its biodiesel policy, including high funding cost, the government and politicians having other priorities while fuel suppliers and palm industry players are not willing to foot the bill. Mandates for renewables are costly in capex and can involve USD billions in support each year  to bridge the gap between fossil fuel and vegetable oil (usually always higher) prices! She opined that Malaysia could remain in “react” mode while dominant producer Indonesia leads in its B40-B50 policy push. This is making waves by making palm oil pricey. Notably, at the recent palm oil gathering in Kuala Lumpur, it is causing much consternation in the market, as restricting exports has started to put palm oil at a price disadvantage and buyers are switching out i.e. demand destruction.