Malaysia B15 biodiesel shift: Timely but long-term viability questioned amid EU import phaseout and carbon tax potential

Malaysia's move to B15 biodiesel is seen as a timely response to high fuel prices and supply uncertainty, but analysts at CGS International question whether the country can sustain higher blends like B20 or B50 without a clear timeline or policy framework. The current favorable palm oil to gasoil spread supports the shift, but a reversal could raise costs and fiscal pressure. A major long-term risk is the European Union's planned phaseout of palm-based biodiesel imports by 2030, citing deforestation. Malaysia has made MSPO certification mandatory since 2020, but full compliance remains a challenge. One proposed solution is to channel carbon tax revenue, potentially up to RM12 billion annually, to subsidize the price gap between palm oil and gasoil. The article argues biodiesel's real value lies in its sustainability contribution to decarbonization and renewable energy targets, not just cost. For Malaysia to succeed, the biodiesel policy needs better alignment between energy security, sustainability, and economic goals.