Malaysia aims to double the palm oil content material in biodiesel used for the transport zone to twenty% subsequent yr, as Southeast Asia’s 0.33-biggest economy looks to cut record stockpiles and boost fees, a government minister said on Tuesday.

The government may also raise the palm oil content material in biofuel for the economic quarter to 10% subsequent 12 months, from a 7% quota being rolled out this July, Primary Industries Minister Teresa Kok said, talking at a conference.

Malaysia’s palm oil inventories fell to 3.001 million tonnes in January on growing demand and falling production, however that turned into still close to the two-decade high of three.22 million tonnes recorded a month earlier.

The increases in the quantity of palm oil mandated for biodiesel — known as B20 for transport and B10 for industrial use — need to elevate use of the vegetable oil in biofuels to one.Three million tonnes yearly, the minister stated.

Kok said her ministry has submitted a proposal to the cupboard to set up a biofuel stabilisation fund to manage the fee of biofuels, a similar mechanism to the export levy fund imposed via fellow palm oil manufacturer Indonesia.

“What if the palm oil price is excessive and the diesel fee has long gone up loads? That would be high priced for the public to use biodiesel, so we need to stabilise the charge, so biofuel will be greater attractive to purchasers,” Kok stated.

“I actually have cautioned (a stabilisation fund) in cupboard assembly before however we nonetheless need to have deeper discussion with different ministries.”

Top palm producer and exporter Indonesia commenced collecting levies from palm exporters in 2015 to assist finance the development of its palm-based biodiesel programme, as well as funding other palm oil schedule, together with replanting.

However, Indonesia’s authorities quickly removed the levy in November, after a pointy drop in fees hit farmers.