B20 biodiesel rollout: Fleet operators lament added costs

KUALA LUMPUR: The impending rollout of the national B20 biodiesel programme in the transportation sector will lead to higher costs, which is coming at a critical time for the logistics industry, transport operators claim.

This is because significant upgrades are required for their lorries and buses before such mass adoption can be seamlessly executed, said operators as well as engine manufacturers.

Yesterday, Deputy Prime Minister Deputy Datuk Seri Dr Wan Azizah Wan Ismail launched the B20 programme here together with Primary Industries Minister Teresa Kok. The use of B20 will be adopted throughout Peninsular Malaysia by June 2021.

The programme was introduced in Langkawi and Labuan in January, and will be expanded in stages to Sarawak in April, Sabah in August, before covering the country’s 3,400 fuel stations.

In Malaysia, B20 is a diesel mix consisting of 20% palm methyl ester and 80% petroleum diesel.

“The implementation of the B20 Programme in the transportation sector will support demand for palm oil and stabilise its prices,” said Dr Wan Azizah at the launch.

The B20 programme follows the B10 programme (10% palm biodiesel and 90% petroleum diesel), which was mandated for the transportation sector on Feb 1, 2019, while the B7 programme (7% palm diesel and 93% petroleum diesel) was pushed for the industrial sector last July.

B20 will be offered here in collaboration with oil companies such as Petronas, Shell, Petron, Chevron, and BHP.

While the intent may appear to be good, fleet operators say that they have to invest anything from RM3,000 to RM4,000 per vehicle when it comes to getting them ready to run on B20.

“In addition to this, the service intervals have been shortened when running on B20. Depending on brand and specifications, previous intervals of 50,000km will go down to 40,000km, while those from 30,000km may go down to 15,000km. On top of this, some engines will also need to be reprogrammed to run optimally on B20,” said Datuk Nazari Akhbar, president of the Association of Malaysian Hauliers (AMH).

AMH counts 150 companies as members, and collectively have a fleet of a few thousand trucks.

Nazari’s company, Taipanco Sdn Bhd, operates a fleet of 250 trucks.

The need for an additional filter stems from biodiesel’s characteristic of easily absorbing moisture from the environment, or what is also called hygroscopic.

READ MORE: Ministry ran stringent tests on B20 biodiesel

Excessive water content will not only lower the energy content of biodiesel when compared with petroleum diesel, but this phenomenon also affects engine startup, operation (incomplete combustion) and subsequent durability, if not managed well.

Even as it is acknowledged that biodiesel tends to absorb moisture from the environment, proponents say that good manufacturing and handling practices will minimise water contamination.

Engine manufacturers are upfront of what it takes to run B20 smoothly.

Volvo Trucks Malaysia said its trucks sold here can use B10 mixes without any modifications, though it is a different story when it comes to B20.

“Volvo Trucks running on D7, D9, D10, D11, D12, D13 and D16 engines are compatible with B7 and B10 fuel without any modification required,” said Mitch Peden, managing director for Volvo Malaysia Sdn Bhd.

“We have a ready solution to support the implementation of B20 in the form of a retrofit kit. Technically, the truck can operate like normal after the kit installation. There will be some adjustment on the service intervals for the engine as the biodiesel contains higher water content,” said Peden.

German engine manufacturer MAN concurred.

“Our vehicles will not be impacted by B20, though from a technical perspective, the fuel filtration system will be required to be upgraded, including a software adjustment, which are chargeable to the customer,” said Andew O’Brooks, managing director for MAN Truck & Bus (M) Sdn Bhd.

UMW Toyota Motor Sdn Bhd, while declaring that B20 is compatible with all Toyota vehicles manufactured and sold in Malaysia, said it welcomed B20 as the Government is committed to ensure the availability of protection grade (B7) in the market, said a company spokesman.

Mitsubishi Motors Malaysia (MMM) expressed concern the effectiveness of B20 for the lack of testing done.

“However, once this effort has been implemented, and if our customers face a problem with their cars, we will assist them in the utmost way possible with our after-sales service,” said a spokesman.

Biodiesel will also present issues for old diesel engines, given that biodiesel tends to dissolve the internal deposits or gunk built up over time, and this may clog up fuel filters.

AMH’s concern is underlined by the relatively thin margins of the industry in the last few years.

“Competition is stiff, price war is rampant, and the introduction of the minimum wage has made things tough for the logistics industry,” said Nazari.

He added that the emergence of the Covid-19 outbreak is another blow to the industry.

“The import-export volume has also thinned further in the light of Covid-19. Some of us do not know how long more we can survive, given that we have business loans to repay.

“The introduction of B20 at this juncture is just more bad news,” said Nazari, who also argued that another industry should not be promoted at the expense of the logistics industry.

“The entire industry is awaiting for some good news from the Covid-19 stimulus package that will be announced soon. If possible, we would appreciate a subsidy of 10 sen per litre of diesel for a year, so that we can recover the bulk of the cost for retrofitting our fleet. Getting ready for B20 is a huge cost for us, and this has to be passed on or shared.”