09/04/2026

THURSDAY | APR 9, 2026

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‘Palm oil limits may hinder B100 biodiesel rollout’

East M’sia fuel subsidy justified, say state leaders KOTA KINABALU: The federal government decision to maintain the diesel subsidy at RM2.15 per litre in Sabah, Sarawak and Labuan is not an act of favouritism but a necessity based on local socioeconomic conditions. State leaders said the vast and challenging geography of the region makes diesel essential for daily movement, with land and water transport relying on it to connect rural areas to towns and deliver basic goods. Sabah Agriculture, Fisheries and Food Industry Minister Datuk Jamawi Jaafar said difficult terrain and limited road infrastructure make diesel-powered vehicles, particularly four-wheel drives, a necessity compared with Peninsular Malaysia. He said the decision is appropriate and should be understood by the wider public. “We thank Prime Minister Datuk Seri Anwar Ibrahim for maintaining the subsidy, as our geographical conditions and daily travel needs are very different.” Jamawi urged the public to use the subsidy responsibly and help prevent misuse. He said his ministry is in discussions with the Domestic Trade and Cost of Living Ministry to ensure small-scale farmers benefit from the subsidy. He also encouraged farmers to switch to compost fertiliser as a more cost-effective alternative amid rising prices of chemical fertilisers. Meanwhile, former Sabah Youth and Sports Minister Tan Sri Liew Yun Fah said the subsidy is not unfair to other states. The Parti Harapan Rakyat Sabah president said the move is justified given differences in basic facilities, road conditions and higher logistics costs. He added that Sabahans have long endured poorer road conditions without questioning the development gap. “Travelling about 450km from Kota Kinabalu to Tawau takes nearly 10 hours, compared with about six hours for a 500km journey from Kuala Lumpur to Perlis. “This is due to poor road conditions, a higher risk of vehicle damage and the lack of rest and recreation areas.” Sabah Education, Science, Technology and Innovation Minister Datuk James Ratib expressed hope that the subsidy would be maintained to avoid a sharp rise in the cost of living. He said higher fuel prices would directly increase transportation costs and in turn, raise prices for consumers. “Not everyone in Sabah is wealthy,” he said, adding that essential goods are already more expensive than in Peninsular Malaysia. Deputy Chief Minister III Datuk Ewon Benedick said Sabah deserves the subsidy as one of the country’s main oil and gas-producing states. The state Industrial Development, Entrepreneurship and Transport minister said Sabah’s resources have long contributed to national development. “It is time for the federal government to review the needs of this oil and gas-producing state, and ensure the benefits are returned to the people.” Ewon added that although some rights of Sabah and Sarawak have yet to be fully implemented, it has not affected the spirit of cooperation and unity among regions in Malaysia. – Bernama

Ű BY HARITH KAMAL newsdesk@thesundaily.com

o Promotion would require subsidy reforms, mandatory usage mandates and infrastructure investments: Educator

PETALING JAYA: Although Malaysia is a major producer of palm oil, it lacks sufficient surplus to sustain large-scale implementation of B100 biodiesel without disrupting existing demand or driving up prices, experts say, highlighting challenges for the government’s renewable energy push. B100, a 100% palm oil-based biodiesel, has been touted by the Federal Land Development Authority (Felda) as a potential alternative energy source capable of reducing diesel reliance, stabilising domestic fuel prices as well as strengthening national energy security. However, supply constraints and sustainability considerations could limit its role to a complementary energy source rather than a full-scale replacement for conventional diesel. Universiti Putra Malaysia agricultural economist Prof Datuk Dr Mad Nasir Shamsudin said while Malaysia has substantial production, it lacks sufficient surplus to sustain large-scale B100 implementation without disrupting existing demand or increasing prices. “In the short term, supply constraints remain a key concern since most of the palm oil output is committed to exports, food consumption and downstream industries,” he said. Diverting crude palm oil (CPO) to fuel production could also have broader economic consequences, he added. “As more CPO is diverted to biodiesel production, the supply available for food and industrial uses declines, leading to tighter market conditions. “This would exert upward pressure on CPO prices, which could translate into higher food costs, particularly in net food-importing countries such as Malaysia.” At an estimated factory price of RM4.50 per litre, B100 may be competitive with market-priced diesel but not with subsidised fuel. “Prices are determined by global market fundamentals and fluctuate with energy and commodity trends. “When CPO prices rise, biodiesel production costs also increase, necessitating fiscal incentives or policy support to sustain B100 adoption,” he explained. He added that promoting B100 would require a coordinated policy framework, including subsidy reforms, mandatory usage mandates, as well as investment in blending and distribution infrastructure. “Targeted fiscal incentives, such as tax exemptions, financing support and sustained research and development investment, are essential to encourage industry participation and ensure long-term viability.” Mad Nasir described B100 primarily as a strategic buffer during energy crises, rather than a long-term substitute for conventional fuels. Sustainability concerns add another layer of complexity. Universiti Teknologi Mara Sarawak

Abdul Rahman said palm oil-based B100 could offer significant carbon savings, but only under strict production conditions. – MASRY CHE ANI/THESUN

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agrotechnology Dr Abdul Rahman Saili said palm oil-based B100 could offer significant carbon savings, but only under strict production conditions. “Biofuels may reduce emissions by between 50% and 90% if produced without deforestation. “However, indirect land-use change could result in emissions up to three times that of fossil diesel.” Scaling B100 production may increase land-use pressures, but Malaysia’s domestic constraints may moderate the impact, he said. “Growth would depend on replanting and yield intensification rather than new land clearing, limiting direct deforestation. “Indirect effects may occur as increased biofuel demand influences global edible oil markets and shifts land away from other crops, such as rubber or food staples.” He emphasised the importance of aligning biofuel expansion with Malaysia’s broader environmental and social commitments. “Effective governance, high-yield practices and robust sustainability certification are important to help maintain food security, environmental protection and international expert Assoc Prof impacts their operating costs.” He said operators must manage expenses more prudently and refine their strategies to control costs while sustaining operations. Kamaruddin said some operators may consider raising prices if cost pressures persist, but urged caution to avoid dampening demand. “Small operators are more vulnerable as they lack the financial reserves to absorb rising costs. Larger operators may be able to absorb the costs temporarily as they have stronger financial capacity.”

credibility,” he said. Safeguards such as land-use limits, avoiding peatland conversion and sustainability certification are essential, he added. Abdul Rahman also said international markets may remain cautious. “European Union markets are likely to be cautious due to sustainability and indirect land-use concerns. “Export opportunities will depend on verified certification, transparent supply chains and demonstrable low environmental impact, while competition from alternative biofuel feedstocks may influence market dynamics.” On Tuesday, Felda chairman Datuk Seri Ahmad Shabery Cheek said B100 could possibly emerge as a more competitive and sustainable alternative energy source, particularly given the uncertainties arising from the Middle East conflict. He added that the rollout, still in the policy stage, would start within the Felda ecosystem, stressing that a government policy is needed first as current CPO supplies may not be sufficient for immediate implementation. He added that the state government will continue to support the tourism industry where possible. “Although fuel pricing falls under federal government jurisdiction, we will explore what assistance can be provided through relevant agencies.” On April 1, the Finance Ministry announced a 50 sen increase in the retail price of diesel in Peninsular Malaysia to RM6.02 per litre, while prices in Sabah, Sarawak and Labuan remain unchanged at RM2.15 per litre. – Bernama

Rising prices straining Kelantan tourism KOTA BHARU: Rising diesel prices are beginning to strain the tourism industry in Kelantan, forcing operators to adapt their operations to cope with higher costs. State Tourism, Culture, Arts and Heritage Committee chairman Datuk

Kamaruddin Md Nor said diesel is a key component for tourism, affecting multiple aspects, such as transport and generators at accommodation premises. “Tour bus operators, lorries and resorts that rely on generators require diesel, so this directly