Malaysia Leans on B15 Biodiesel for Energy Security, Still Far Behind Indonesia's B50

Kuala Lumpur — Malaysia, the world's second-largest palm oil producer after Indonesia, is relying on its B15 biodiesel programme to reduce its dependence on fossil diesel amid oil price volatility caused by conflict in West Asia. Compared with Indonesia, which already implements B50, however, its neighbour is moving far more cautiously.

Malaysia's Minister of Plantation and Commodities Datuk Seri Dr. Noraini Ahmad told the Dewan Rakyat on Tuesday (6 October 2026) that the B15 programme is expected to reduce Malaysia's dependence on petroleum diesel while strengthening energy security, The Borneo Post reported. She was responding to a lawmaker's question on how far B15 could curb reliance on diesel, whose price is vulnerable to geopolitical conflict. According to Noraini, domestically produced biodiesel can reduce Malaysia's exposure to global price swings.

B15 in force since June

Malaysia began raising its biodiesel blend from B10 to B15 in stages from 1 June 2026, starting in Peninsular Malaysia. During a visit to the Klang Valley Distribution Terminal (KVDT), Noraini described B15 as "a strategic government move to strengthen national energy security and reduce dependence on fossil fuels," Bernama reported.

• Feedstock needs: around 801,000 tonnes of CPO per year — small relative to Malaysia's palm oil output of about 20 million tonnes a year, of which nearly 16 million tonnes are exported. The Malaysian government has stressed that B15 will not disrupt exports.
• Infrastructure: 452 palm oil mills, 54 refineries, 19 biodiesel plants and 34 blending depots, reaching more than 4,400 fuel stations.
• Varying blend levels: Sarawak (except Bintulu), Labuan and Langkawi already use B20, while other areas remain on B10, B12 or B15. The industrial sector still uses B7.
• Price: the retail price of B15 is the same as that of regular diesel.

Stalled at B20 for years

Malaysia's biodiesel programme has advanced gradually since 2011, from B5 to B7 and then B10. A nationwide B20 rollout, promised since 2021, has yet to materialise, mainly because of hurdles in investing in blending facilities. In 2025, the government and industry players reached an impasse over who should bear the roughly RM643 million investment needed for B20. The Malaysian Biodiesel Association is now urging the government to speed up infrastructure upgrades so that regions that are ready can move straight to higher blends, up to B30. The 13th Malaysia Plan also includes phased depot upgrades to support B20 and B30, including a B30 plan for commercial and public transport.

How Malaysia compares with Indonesia

Aspect	Indonesia	Malaysia
Current mandatory blend	B50 (mandatory since 1 July 2026; at all fuel stations since 1 October 2026)	B15 phased in across Peninsular Malaysia; B20 in some regions
Palm oil needed for biodiesel	More than 10 million tonnes of CPO per year	About 0.8 million tonnes of CPO per year (B15)
Next step	B60 under study for 2027	B20 expansion, B30 under discussion

Editor's note

The world's two largest palm oil producers are taking sharply different approaches. Indonesia has chosen to prioritise its domestic market and energy self-sufficiency, at the cost of less room for exports — an issue also raised by GAPKI in its proposal for a flexible biofuel policy. Malaysia has opted for a gradual path that protects export volumes. As biodiesel uptake rises in Indonesia, global palm oil supply may become increasingly dependent on Malaysia — a dynamic market participants should watch closely.