The Principles of National Biofuel Policy & Malaysia Biofuel Industry Act

Every countries has its environmental laws as well as regulations of biofuel production in order to ensure the sustainability of environment and industry. Malaysia consists of two laws and policies of biofuel industry which are National Biofuel Policy (NBP 2006) and Malaysia Biofuel Industry Act 2007 (Act 666). This is to ensure healthy development of the biofuel industry. Both of these laws or policies emphasize its major concerns regarding the biofuel industry in Malaysia.

National Biofuel Policy (NBP 2006) was enforced in 2006. The policy mainly focuses on the profit-oriented, utilization, research, technology and export of biodiesel. It is essentially aimed at reducing the country’s dependence on depleting fossil fuels, promoting the demand for palm oil as well as maintaining its prices at a profitable level. The policy is supported by five strategic thrusts which are biofuel for transport, industry, technologies, export and cleaner environment. Moreover, the implementation of this policy consists of three categories.

Short term:

• The Malaysian Standard specification for B5 diesel will be established.
• Participation in B5 diesel trials by using chosen government departments with their fleets of diesel vehicles.
• Only chosen stations will initiate B5 diesel pumps for the public.
• Voluntary trials on B5 diesel will be run via the Malaysian Palm Oil Board (MPOB) for selected customers in the industrial sector.
• Promotional recognition programme will train the public on the use of B5 diesel.

Medium term:

• The establishment of Malaysian Standard specifications for palm oil-based methyl ester biofuel for local use and export.
• Engine producers will be lengthen its warranties to the use of B5 diesel. Extensive B5 diesel testing shall be perform to advance the granting of such engine warranties.
• Legislation to command the use of B5 diesel will be exceeded and enforced.
• The MPOB will launch the establishment of palm biodiesel vegetation in Malaysia alliance with the non-public sector.

Long term:

• Gradual increase in proportion of processed palm oil within the diesel mix.
• Greater uptake of biofuels technology by means of Malaysian corporations and foreign firms abroad.

Malaysian Biofuel Industry Act 2007 (Act 666) was enforced on 1 August, 2008 with the motive of providing legislation for the mandatory use of biofuel, licensing of activities relating to biofuel and for matters connected therewith and incidental thereto.

According to Section 5, activities that need to be licensed are as follows:

a) Production of biofuel

• Commence to construct any biofuel plant or biofuel blending plant.
• Produce any biofuel.
• Blend any biofuel with any other fuel or biofuel.

b) Trading of biofuel

• Export any biofuel, biofuel blended with any other fuel or biofuel blended with any other biofuel.
• Import any biofuel, biofuel blended with any other fuel or biofuel blended with any other biofuel.
• Transport any biofuel, biofuel blended with any other fuel or biofuel blended with any other biofuel.
• Store any biofuel, biofuel blended with any other fuel or biofuel blended with any other biofuel.

c) Biofuel Services

• Survey any biofuel, biofuel blended with any other fuel or biofuel blended with any other biofuel.
• Test any biofuel, biofuel blended with any other fuel or biofuel blended with any other biofuel.

In addition, those who conduct the activities without a valid license, on conviction, be liable to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

Furthermore, the Minister have the authority to make regulations as are necessary to give full effect to or for carrying out the provisions of this Act. The Minister may make regulations as follows:

a) Prescribing the standards of processing, storage, transportation and handling of biofuel.

b) Prescribing the standards or grades of biofuel.

c) Prescribing the procedure to be followed by exporters in exporting biofuel.

d) Providing for the maintenance of proper standards of conduct in the carrying out of the biofuel industry.

e) Prescribing the practices to be observed or avoided in the biofuel industry

f) Prescribing the name or description to be used for the biofuel

g) Prescribing the offences which may be compounded

h) Prescribing the records and documents to be kept and returns to be submitted.

i) Prescribing the fees and charges payable to the licensing authority under this Act.

j) Providing for the regulation of all or any of the activities of the licensing authority.

k) Providing for such other matters as are contemplated by or necessary for giving full effect to the provision of this Act.