Malaysia postpones biodiesel mandate rollout to 2022 - state media

KUALA LUMPUR, Jan 8 (Reuters) - Malaysia will delay the nationwide rollout of its B20 palm oil biodiesel mandate to early 2022 to prioritise an economy that has been battered by the COVID-19 pandemic, state news agency Bernama reported late Thursday.

The mandate to manufacture biofuel with a 20% palm oil component - known as B20 - for the transport sector was first rolled out in January last year, and was set to be fully implemented across the country by mid-June 2021.

"Nationwide we are giving priority for the government's post COVID-19 economic recovery plan, which is more crucial," Plantation Industries and Commodities Ministry secretary general Ravi Muthayah was quoted as saying.

"We have limited resources and must identify priorities," he said.

Rival and top producer Indonesia has also pushed back plans to raise the bio-content of palm oil-based biodiesel to 40% and instead raised export levies to finance its B30 programme after the pandemic triggered a collapse in crude oil prices.

A rally in Malaysia's benchmark crude palm oil prices to its highest in nearly a decade has also widened its premium over crude oil, making palm a less sustainable option for biodiesel feedstock. (Reporting by Mei Mei Chu; Editing by Shailesh Kuber)

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