Oil Palm Industry Economic Journal Vol. 11 (1) March 2011 p. 23-27

Socio-economic and Feasibility Study of Utilising Palm Oil Derived Biofuel in Malaysia

Muhammad Hanafi Asril Rajo Mantari; Mohammad Nazri Mohd Jaafar and Adrian Paul Raj
Received:    Accepted:    Available Online:


In May 2006, the Malaysian government introduced the National Biofuel Policy to reduce the nation’s dependence on non-renewable fossil fuels. This study was carried out to determine the feasibility of using palm oil derived biofuel (Envodiesel) in Malaysia in term of socioeconomic impact to both, the government and consumer. Among the parameters studied were the amounts of excess crude palm oil available for palm biofuel blending without affecting local and international consumption of palm oil and financial costing or government savings in term of subsidy from the use of palm biofuel blends (B5, B10, B15, B20, B25) in Malaysia. It is concluded that the supply of local palm oil is enough to cater biofuel usage up to B15 without disturbing supply for other used of palm oil. Furthermore, Malaysian government needed to subsidise nearly RM 4 billion annually in order to keep the price of biofuel remains at competitive level.

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