Impact of biodiesel blend mandate (810) on the Malaysian Palm Oil Industry

Over the last ten years biofuels production has increased dramatically. One of the main factors is the rise in world oil prices, coupledwith heightened interest in tlle abatetnent ofgreenhouse gas emissions and concerns about energt security. The increment in production has been driven by governme...

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Main Authors:	Shri Dewi A/P Applanaidu, Anizah Md. Ali, Mohammad Haji Alias
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2014
Online Access:	http://journalarticle.ukm.my/8510/ http://journalarticle.ukm.my/8510/ http://journalarticle.ukm.my/8510/1/jeko_48%282%29-3.pdf

id	ukm-8510
recordtype	eprints
spelling	ukm-85102016-12-14T06:47:24Z http://journalarticle.ukm.my/8510/ Impact of biodiesel blend mandate (810) on the Malaysian Palm Oil Industry Shri Dewi A/P Applanaidu, Anizah Md. Ali, Mohammad Haji Alias, Over the last ten years biofuels production has increased dramatically. One of the main factors is the rise in world oil prices, coupledwith heightened interest in tlle abatetnent ofgreenhouse gas emissions and concerns about energt security. The increment in production has been driven by governmental interventions. In the US, the worldb largestfuel ethanol producer, strongfinancial incentives are guaranteedfor biofuel manufacturers. While, in the European (Jnion, the worldb largest biodiesel producer, biofuel consumption is mostly driven by blending mandates in both France and Germany. In the case of Malaysia, biodiesel started to be exported since 2006. The policy mandate of B5 blend of palm oil based biodiesel into diesel in all government vehicles was implemented in February 2009. h is expected that the blend of 85 will be increased to B l0 in future. This paper seeles to examine the impact of B l0 on the Malaysian palm oil market. A structural econometric model consisting of eight structural equations and four identities was proposed in this study. The model has been estimated by two stdge least squares method using annual data for the period 1976- 201 l. The specification ofthe structural model is based on a series ofassumptions about general economic conditions, agricultural policies and technological change. The study indicates that counterfactual simulation ofan increasefrom 85 to B l0 predicts a positive increase (23.31 per cent) in palm oil domestic consumption, 109.3 per cent decrease in stock, 0.07 per cent increase in domestic price of palm oil and a marginal (0.05 percent) increase in production. An increase in domestic demand would make Malaysia more competitive regionally and globally with benefits accruing to all Malaysians. Penerbit Universiti Kebangsaan Malaysia 2014 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/8510/1/jeko_48%282%29-3.pdf Shri Dewi A/P Applanaidu, and Anizah Md. Ali, and Mohammad Haji Alias, (2014) Impact of biodiesel blend mandate (810) on the Malaysian Palm Oil Industry. Jurnal Ekonomi Malaysia, 48 (2). pp. 29-40. ISSN 0127-1962 http://www.ukm.my/fep/jem/content/2014-2.html
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	Over the last ten years biofuels production has increased dramatically. One of the main factors is the rise in world oil prices, coupledwith heightened interest in tlle abatetnent ofgreenhouse gas emissions and concerns about energt security. The increment in production has been driven by governmental interventions. In the US, the worldb largestfuel ethanol producer, strongfinancial incentives are guaranteedfor biofuel manufacturers. While, in the European (Jnion, the worldb largest biodiesel producer, biofuel consumption is mostly driven by blending mandates in both France and Germany. In the case of Malaysia, biodiesel started to be exported since 2006. The policy mandate of B5 blend of palm oil based biodiesel into diesel in all government vehicles was implemented in February 2009. h is expected that the blend of 85 will be increased to B l0 in future. This paper seeles to examine the impact of B l0 on the Malaysian palm oil market. A structural econometric model consisting of eight structural equations and four identities was proposed in this study. The model has been estimated by two stdge least squares method using annual data for the period 1976- 201 l. The specification ofthe structural model is based on a series ofassumptions about general economic conditions, agricultural policies and technological change. The study indicates that counterfactual simulation ofan increasefrom 85 to B l0 predicts a positive increase (23.31 per cent) in palm oil domestic consumption, 109.3 per cent decrease in stock, 0.07 per cent increase in domestic price of palm oil and a marginal (0.05 percent) increase in production. An increase in domestic demand would make Malaysia more competitive regionally and globally with benefits accruing to all Malaysians.
format	Article
author	Shri Dewi A/P Applanaidu, Anizah Md. Ali, Mohammad Haji Alias,
spellingShingle	Shri Dewi A/P Applanaidu, Anizah Md. Ali, Mohammad Haji Alias, Impact of biodiesel blend mandate (810) on the Malaysian Palm Oil Industry
author_facet	Shri Dewi A/P Applanaidu, Anizah Md. Ali, Mohammad Haji Alias,
author_sort	Shri Dewi A/P Applanaidu,
title	Impact of biodiesel blend mandate (810) on the Malaysian Palm Oil Industry
title_short	Impact of biodiesel blend mandate (810) on the Malaysian Palm Oil Industry
title_full	Impact of biodiesel blend mandate (810) on the Malaysian Palm Oil Industry
title_fullStr	Impact of biodiesel blend mandate (810) on the Malaysian Palm Oil Industry
title_full_unstemmed	Impact of biodiesel blend mandate (810) on the Malaysian Palm Oil Industry
title_sort	impact of biodiesel blend mandate (810) on the malaysian palm oil industry
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2014
url	http://journalarticle.ukm.my/8510/ http://journalarticle.ukm.my/8510/ http://journalarticle.ukm.my/8510/1/jeko_48%282%29-3.pdf
first_indexed	2023-09-18T19:52:29Z
last_indexed	2023-09-18T19:52:29Z
_version_	1777406311485407232

Impact of biodiesel blend mandate (810) on the Malaysian Palm Oil Industry

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