KUALA LUMPUR, March 24 — Malaysia’s biodiesel exports are expected to fall to a four-year low of 350,000 tonnes this year, dragged down by pressure from the European Union (EU) restrictions as well as the Covid-19 pandemic, said Malaysian Biodiesel Association (MBA) president UR Unnithan.
He said palm-based biofuel exports are estimated at 378,582 tonnes in 2020.
“Exports has slowed since the EU moved to cap the use of palm oil for transport fuel at 2019 levels due to concern on deforestation and aimed to eliminate its use by 2030.
“Malaysia’s biodiesel exports are unlikely to better the performance seen in 2019 due to the EU Delegated RED II Act,” he said at the Virtual Palm and Lauric Oils Price Outlook Conference (Virtual POC 2021) yesterday.
The two-day Virtual POC 2021 (March 23-24) has attracted over 2,500 registrations and close to 1,700 participants from 55 countries.
Unnithan said MBA estimates the entire EU’s consumption of palm biofuel in 2019 was 6.2 million tonnes.
“In our opinion, the actual exports to the EU this year will start at much lower levels because EU member states are pushing for a no palm-biofuel agenda.
“Besides that, there is a high possibility that member states will also phase out palm biodiesel even before the 2030 deadline,” he added.
In conclusion, he said the Covid-19 pandemic has caused serious supply disruptions leading to high palm oil gas oil spreads. Hence for 2021, supply pressures will continue until the second half of 2021.
“Prices have very strong support at the moment, but should production improve, I expect the market to come down in the third or fourth quarter of this year. Therefore my projection for CPO prices will be RM3,500 per tonne for the year,” he said.
— Bernama
