Infrastructure costs, supply chains and industry readiness could pose problems for wider adoption of biodiesel blends, analysts say
4-MIN READ4-MIN ListenIman Muttaqin YusofPublished: 5:00pm, 6 Apr 2026Malaysia is facing renewed pressure to expand palm-based biodiesel as the Iran war drives up fuel costs, but industry and academic observers say high infrastructure costs and slow roll-out make it an unlikely source of quick relief.That tension has sharpened as the government confronts a swelling fuel subsidy bill and greater exposure to imported supply shocks.The finance ministry last month said petrol and diesel subsidies could reach 4 billion ringgit (US$903 million) a month with crude oil at about US$100 a barrel. Prime Minister Anwar Ibrahim has noted that nearly half of Malaysia’s oil supply passes through the Strait of Hormuz, which is mostly closed off to maritime traffic due to the Iran war, and that the country imports more oil than it exports.AdvertisementDiesel in Peninsular Malaysia rose to 6.02 ringgit a litre for the week of April 2 to 8, while the monthly subsidised RON95 quota under the BUDI95 scheme was cut from 300 litres to 200 litres.The fuel shock has reopened a long-running debate over whether Malaysia should accelerate its stalled B20 biodiesel programme, a fuel blend consisting of 20 per cent biodiesel and 80 per cent petroleum diesel.
Former commodities minister Teresa Kok said late last month that palm methyl ester had become cheaper than pure diesel at prevailing prices and urged the government to revive delayed depot upgrades.
