Turning to the alternative: The push for biofuels in Southeast Asia
WORDS BY ANTONINA JOSON
The oil crisis and its consequences have gripped industries across the world. Costs have risen, delaying operations, and inconveniencing businesses, organisations, and regular people alike. Governments around the world are doing their best to curb the pricey consequences of the oil shortage.
In Southeast Asia, several governments initially pushed for EVs, creating an overwhelming trend in the region. Electric cars, though powered by electricity, are still indirectly powered by fuel. The energy needed to charge an EV is still taken from fossil fuelled electricity grids.
Though they continue to do so, the oil shortage has also prompted these entities to tap into their reserves and promote alternative fuels in place of petrol.
| Malaysia
Prior to the recent push for biodiesel, Malaysia already had an established local palm oil industry. The country is considered the world’ s“ second top producer of crude palm oil.” It provides around 24 per cent of the world’ s total crude palm oil production. Palm oil production is considered the“ economic backbone” of Malaysia, earning the country MYR 102 billion( AUD $ 36 billion) in revenue in 2021.
Running simultaneously with its present EV programs, the Malaysian government has consistently promoted use of palm oil-based biofuels from its own reserves. Starting in 2006, the country’ s National Biofuel Policy required areas of Malaysia to sell fuel with at least 5 per cent palm oil.
Over time, the required percentage of palm oil for the transportation sector increased. Initially, the increase to B10 was to be executed by 2014, however, its full implementation did not come to fruition until 2019. At the time, then-Prime Minister Tun Dr Mahathir Mohamad said that the gradual increase would“[ reduce ] emission dust and black smoke into the air.” He also remarked that that the timing of the increase was appropriate due to“ the lower price of palm oil biodiesel compared to petroleum diesel.”
Though Malaysia has not yet fully transitioned to EVs, new vehicle registrations have steadily reflected its increasing popularity. The country’ s financial incentives have proved effective, driving EV annual usage by up to 14 times.
The popularity of EVs has not stalled despite many Malaysians still opting for internal combustion engine( ICE) vehicles. To answer the needs of Malaysian motorists and reduce import costs, the government increased the mandated biofuel percentage from B10 to B15. The government originally planned to increase the required biodiesel component to B20 as early as 2025 but paused as the costs were deemed too high.
32 ISSUE 59 JUNE 2026 / WWW. AFMA. ORG. AU