Over the years, MPOB has shown that palm oil and its methyl esters can be successfully used as biofuel either directly or as blends with petroleum-based fuels. With global environmental concerns and in views of high petroleum prices and depleting resources of fossil fuels, strategic moves to the use of liquid fuels have been made by many countries. Biofuel development and its future implementation in Malaysia in relation to the national energy policy is summarized in this paper.