Indonesia's government plans to expand biodiesel subsidies to cover consumption of palm oil-blended fuels by the mining sector this year as part of ambitious plans to develop the energy source, an energy ministry official said on Thursday (04/01). (Antara Photo/Oky Lukmansyah)

Malaysia, Indonesia Biodiesel Production Forecast to Rise in 2017


MARCH 07, 2017

Kuala Lumpur. Malaysia will produce about 900,000 metric ton of biodiesel in 2017, up about 80 percent from half a million metric ton last year, while Indonesian output will rise to 3.5 million metric tons this year from 3 million metric tons  in 2016, an industry expert said on Tuesday (07/03).

"These are the forecasts based on the current pricing of crude palm oil and oil prices," said U.R. Unnithan, president of the Malaysian Biodiesel Association on the sidelines of a palm oil industry conference in Kuala Lumpur.

Benchmark palm oil prices are up nearly 3 percent so far this month after sliding 8.5 percent on expectations of rising output and weakening demand in February.

Palm oil is down 1.5 percent at 2,851 ringgit ($640.94) per metric ton on Tuesday evening.

Palm oil can be used to produce the bio components of biodiesel grades sold at retail fuel pumps. Low crude oil prices, though  benchmark crudes are still around half of what they were in mid-2014  are expected to make it tougher for biodiesel to compete against petroleum diesel.