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More than 90% of diesel users choose the cheaper B20 fuel in Indonesia.

More biodiesel for Malaysia’s cars?

POSTED BY Nigel Andretti ON 09 May 2017

Dr Harrison Lau Lik Nang had a look of chagrin on his boyish face. Internationally renowned in the highest circles of vegetable oils research, the scientist’s fame precedes him in Indonesia, the source of his discontent.

Dr Harrison Lau receiving a memento from PT Pertamina Patra Niaga’s Operations Director Gema Iriandus Pahalawan.

Dr Harrison Lau receiving a memento from PT Pertamina Patra Niaga’s Operations Director Gema Iriandus Pahalawan.

“Imagine, we (Malaysia) were the leaders in the research and implementation of biodiesel last time and today, Malaysia is still stuck at B7 biodiesel implementation.

“Indonesia introduced B20 last year and they have a mandate for the implementation of B30 by January 1, 2020,” he said.

“We’re going backwards,” he lamented.

Lau, 42, was speaking on the sidelines of a three-day trip that the Malaysian Palm Oil Board (MPOB) had organised for the media and stakeholders – the Malaysia Automotive Institute (MAI) and the Malaysian Trucking Federation – to study the implementation of the biodiesel programme in Indonesia.

The Indonesian officials greeted Lau and our delegation warmly, and our questions were answered with more than respect – there was a sort of missionary zeal to promote biodiesel.

Lau is the principal research officer and group leader for biodiesel technology, energy and environment unit, engineering and processing research division of the MPOB. He’s the driving force behind bio-diesel implementation in Malaysia and he has a vision for this particular field of chemistry to change the world.

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On that note, it is time to sort out facts from wishful thinking.

Fact 1: Indonesia and Malaysia supply about 55% of the world’s vegetable oils and fats export.

Fact 2: There are about 30 types of biofuels, including avocado, soy, rapeseed, sunflower seed and tung oil, but the oil palm tree is the king of all because it has an output of 5,950 litres of oil per hectare of land, almost double the amount of the next most productive source, coconut.

Fact 3: biodiesel made from palm oil (palm methyl ester or PME) is the best of all vegetable biodiesels in the tropical environment.

Fact 4: There is no independent and internationally respected automotive testing laboratory that is able to provide comprehensive biofuel testing and validation other than the Japan Automotive Manufacturers Association (JAMA) and Denso fuel injection equipment manufacturer.

The big predicament

In that context, what are the circumstances that block the adoption of a higher concentration of biodiesel in Malaysia?

Why is it wishful thinking for Malaysia to be able to emulate Indonesia in the roll-out of palm bio-diesel to B20 or, higher to B30 in 2020?

Let’s start with the understanding of bio-diesel.

Vegetable oil as transport fuel got new life with the emergence of environmentalism, renewable energy and sustainability in the 1980s.

The application of bio-diesel by the European Commission, for instance, is purely driven by sustainability, renewable fuels and lower emissions.

PME derives from injecting methanol into palm oil in a heated environment. PME is created with glycerine as a byproduct, is chemically similar to diesel and thus, inedible.

Indonesia’s use of bio-diesel is driven by policy to diversify sources of land transport fuel and avoid depleting sources for mineral oil.

More than 90% of diesel users choose the cheaper B20 fuel in Indonesia.

More than 90% of diesel users choose the cheaper B20 fuel in Indonesia.

Both Indonesia and Malaysia have a noble agenda, to support agriculture and the rural sector which are heavily dependent on palm oil.

The support to reduce price volatility in bio-fuels is because it can adversely impact poor rural farmers of oil palm trees.

“Before we started the bio-diesel programme, there were times when the price of crude palm oil dipped below the price of crude oil,” confirmed Lau.

“This extreme price volatility was terribly unsettling for small rural farmers.”

And it’s also an unfair burden on agricultural producers, of which the Government has a duty to address as far as possible.

This is the most important part of palm bio-diesel’s role in stabilising national income and on a primary level, the livelihoods of the rural population.

It is wishful thinking, however, that Malaysia can do the same as Indonesia in the implementation of B10 and B20. Malaysia must do more work because as a market, it pales in comparison to Indonesia, which with its 260 million population is almost 10 times bigger and more attractive.

Automakers and truck makers will bend to the wishes of Indonesia as far as there are technical solutions to challenges. Previously, JAMA conducted tests in collaboration with the Gabungan Industri Kenderaan Indonesia (Gaikindo) and gave its suggestions on the measures required to accommodate B20.

Gaikindo’s Secretary of Industry Development Compartment Abdul Rochim.

Gaikindo’s Secretary of Industry Development Compartment Abdul Rochim.

That is not reflected in Malaysia where Gaikindo’s counterpart, the Malaysia Automotive Association (MAA), was unable to attend MPOB’s study trip to Indonesia.

So, should the MAA learn from Gaikindo’s B20 experience for its own B10 implementation?

One reason why Malaysia will need to do a bit more work to promote bio-diesel is that it is a nation that seeks to develop its automotive industry but without Indonesia’s powerful economies of scale.

Indonesia simply needs to advise auto manufacturers that they must adhere to the nation’s policies to continue doing business in the country. Car makers then cope by making the necessary adjustments.

On the other hand, Malaysia which has dropped to third in Asean as an automaker by production numbers, needs to further cultivate automotive manufacturers because this sector of the economy provides 700,000 jobs and contributes four per centor about RM40bil a year to the national Gross Domestic Product.

Malaysia needs to create more high-value jobs in manufacturing and through the MAI, work with automakers and vendors to create value for the Malaysian economy.

Therefore, Malaysia has to balance its act in the case of B10 palm bio-diesel implementation, together with the needs of the rural, agriculture and urban, and manufacturing communities.

The large bike population sparked the need for dedicated motorcycle pumps.

The large bike population sparked the need for dedicated motorcycle pumps.

The country must balance the cost of implementation because biodiesel is acceptable only when the price is affordable. Palm oil is food and costs more than raw mineral oil, so there must be a balance beyond which it would be unviable to increase the concentration of palm bio-diesel.

The MPOB has to seek independent testing and validation to win the trust and cooperation of automotive manufacturers.

Malaysia could yet again lead the world vegetable oils and fats research community by setting new international standards for PME bio-diesel.

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