Malaysia's 2024 biodiesel exports projected to hit five-year high amid stable production: USDA

Malaysia's biofuels market is poised for growth, driven by a significant increase in biodiesel exports, which are expected at a five-year high in 2024, despite the overall biodiesel production remaining stagnant year on year, according to the USDA biofuels annual report Nov. 23.

Biodiesel exports seen at five-year high

In 2024, Malaysia's biodiesel exports are anticipated to reach 810 million liters, marking an increase of 8 million liters from the 802 million liters exported in 2023.

The European Union remains the primary destination for these exports, with significant demand also coming from Singapore, the US, and China. Conversely, biodiesel imports into Malaysia are expected to see a slight decline in 2024, decreasing by 1 million liters to 210 million liters compared to 211 million liters in 2023, primarily sourced from Indonesia, according to the USDA report.

Malaysia's biodiesel output steady on year

The forecast for Malaysia's biodiesel production in 2024 is expected to remain unchanged at 1,580 million liters, same as 2023. This stagnation is primarily due to the biodiesel blending rate being maintained at B10, while the B20 and B30 mandates have yet to be implemented.

Total biodiesel consumption in Malaysia for 2024 is projected to reach 995 million liters, which is a slight decrease of 0.3% from the 998 million liters consumed in 2023. This decline in consumption is largely attributed to the removal of blanket subsidies for biodiesel products, which took effect in June 2024.

UCO exports soar

Malaysia has experienced a remarkable increase in its exports of Used Cooking Oil (UCO), with projections indicating that the volume exported could potentially triple between 2023 and 2024. This surge is largely driven by heightened demand from the US and European markets, where UCO is increasingly utilized for biofuel production.

During the first eight months of 2024, the most significant rises in exports were recorded in shipments to the Netherlands, which saw an extraordinary increase of 846% compared to the same period in 2023. The US experienced a 489% increase, while exports to Spain jumped 661%. Additionally, Malaysia's imports of UCO have gradually increased over the past five years, particularly from Indonesia, Germany, and China.

SAF still in emerging stage

The production of sustainable aviation fuels (SAF) in Malaysia is still in its nascent stages, with no commercial operations currently established.

Industry experts identify three main feedstock sources for SAF projects in the country: used cooking oil (UCO), crude palm oil (CPO), and micro-algae.

A key challenge in utilizing UCO is the difficulty of collection, as there are limited collection centers, and a significant portion of the collected UCO is already allocated to export markets. In response to this challenge, Petronas, Malaysia's national petroleum company, started with collection centers for UCO at three of its gas stations in the Klang Valley in October 2023 and eventually expanded to numbers of stations nationwide. This initiative represents a strategic step in preparation for their upcoming SAF plant, which is expected to commence operations by 2028.