Indonesia considers policy reform to save biodiesel program

Image: Pixabay


Policy changes are needed in Indonesia so the country can maintain subsidies for its biodiesel program, the agency said. Reuters the head of a government agency on December 2.
It is mandatory for diesel to be blended with biological content 30% (B30) in Indonesia. However, plans to increase this amount to 40% have been delayed due to funding issues, the company said. Reuters .

Estate Crop Fund Agency (BPDP) chief executive Eddy Abdurrachman made the comments at the Indonesia Palm Oil Conference on December 2.

“The price difference between crude palm oil and diesel increased in 2020, posing a challenge to the sustainability of the support program, especially the mandatory biodiesel program,” he said.

The BPDP is the agency in charge of collecting and administering palm oil export taxes.

It was projected that in 2021, a significant increase in funds would be needed, Abdurrachman said, estimating that Indonesia would consume 9.59 million kiloliters of biodiesel next year.

Indonesia's biofuels program aimed to maximize domestic use of palm oil and reduce oil imports. However, a drop in oil prices this year has made it less economical, the Reuters .

“Policy adjustments are needed,” Abdurrachman said.

{module Form RD}

Paulus Tjakrawan of the Indonesian Biofuel Producers Association told the conference that the price difference between the bio component of biodiesel – fatty acid methyl esters (FAME) made from palm oil – and diesel had increased to about US$$. 400/ton in 2020 around US $ 100 last year.

Indonesia needed to raise taxes on palm oil, impose a tax on fuel consumption or have palm oil companies contribute subsidies to support the program, said Bustanul Ariffin, an economist at the Institute for Development Economics and Finance, in conference. The program could suffer a deficit of 12.2 trillion rupiah (US $ 865.25 million) next year, he said.

Since June this year, Indonesia has levied a maximum duty of US $ 55/t on palm oil exports, regardless of the price, said the Reuters .

In September, Indonesia's Chief Economy Minister Airlangga Hartarto told Reuters that there were plans to revise its palm oil export tax rules to allow for higher collection when prices rise, but no regulations have been issued to date.

Dadan Kusdiana, an energy ministry official, told the conference that Indonesia's biodiesel consumption in 2020 was equivalent to 165,250 barrels of oil/day and saved US $ 3.09 billion in foreign exchange and 25.6 million tons of carbon.

This text was automatically translated from English.

Source: OFI International

Facebook
twitter
LinkedIn

Aboissa supports

Stay up to date with news
and the best opportunities in
agribusiness – sign up now!

Asia

Saudi Arabia

Bangladesh

China

singapore

South Korea

United Arab Emirates

Philippines

India

Indonesia

Iraq

Jordan

Lebanon

Malaysia

Oman

qatar

Türkiye

Vietnam

Hong Kong

America

Argentina

Bolivia

Brazil

Canada

Chile

Colombia

Ecuador

U.S

Guatemala

british virgin islands

Mexico

Nicaragua

Panama

Paraguay

Peru

Uruguay

Suriname

Venezuela

Dominican Republic

Costa Rica

Cuba

Africa

South Africa

Algeria

Cameroon

Costa do Marfim

Egypt

Liberia

Morocco

Sierra Leone

Sudan

Kenya

Tunisia

Mauricio Islands

Europe

Albania

Germany

Belgium

Bulgaria

Spain

Finland

France

England

Italy

Lithuania

Poland

Portugal

Russia

Türkiye

Serbia

Sweden

Switzerland

Ukraine

Cyprus

Estonia

Ireland

Romania

Oceania

Australia

New Zealand

Request a quote!

Fill out the form and get support for your business needs.
Our experts are ready to offer customized solutions.

*We are currently not working with intermediaries.

By providing my data, I agree with the Privacy Policy.