Impact of Covid-19 on developments of bioenergy in Malaysia and digital financing for post pandemic recovery
List of Authors
  • Lim, M.T. , Nimellnair, S.

Keyword
  • Bioenergy, Biofuel, Malaysia, Digital financing, Palm oil, Blockchain, Covid-19, Renewable energy, Sustainable development, Green bonds

Abstract
  • Malaysia implemented a nationwide lockdown on 18th March 2020, disrupting supply chains for various economic sectors. Since 14 October and 7 Nov 2020, Malaysia has entered a second period of lockdown, but with most economic sectors still operational. This paper summarizes the impact of the lockdown measures on the development of bioenergy in Malaysia. The review shows that the demand for oil and its subsequent price dropped during the lockdown. Consequently, the government’s revenue from dividend payments by the national petroleum company reduced. The palm oil gas oil spread subsequently increased, reducing the viability of blending biofuels with fossil fuels. The review also shows that the lockdown has caused a shortage of labour, however, this did not reduce the supply of crude palm oil as was forecasted in the initial months of the lockdown. Demand for crude palm oil, higher exports and lower stockpiles, increased its price to record levels. Though the price of crude palm oil is lucrative, the palm oil gas oil spread has increased, reducing the feasibility of liquid biofuel uptake. With a lower petroleum-based tax revenue, shift of policies and disbursement of public funds to address the impact of the lockdown measures on the wider economy, causing a lower possibility of the government financing green projects. This review postulates that future financing for green projects will be based on emerging digital technology like blockchain. Several pilot projects have been rolled out to raise investments for green bonds, thus encouraging community participation and widening the investor base.

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