Indonesia is expected to complete the full implementation of B40 Biodiesel by March

Eniya Listeiani Dewi, an official with the energy ministry, said that Indonesia is expecting its B40 Biodiesel Programme, which aims to reduce its dependence on diesel fuel imported from abroad, to be fully implemented next month, after initial delays.

She stated that distribution of palm oil-based Biodiesel in this year had reached approximately 1.2 million Kilolitres by Friday.

Indonesia planned to introduce the mandatory B40 blend, which contains 40% palm oil fuel, on January 1, but regulatory issues caused some delays. Fuel distributors received until the end February to transition.

The blend previously contained 35% Palm Oil.

Eniya stated that the transition period will not be extended. She told reporters, "I believe that everyone is trying to meet it."

Palm oil traders are closely watching the implementation of Indonesia’s mandatory higher biodiesel mix as they assess how it may impact Indonesia’s palm oil exports.

Indonesia, the largest palm oil producer in the world, has set aside 15.6 million KL for biodiesel distribution by 2025. This is an increase from 13 million KL distributed last year.

This year's higher volume may necessitate a larger subsidy that Indonesia provides for palm diesel production. To fund the anticipated higher subsidy, the government plans on raising the export levy for crude palm oil from 7.5% to 10%.

Eddy Abdurrachman is the chief executive officer of the state plantation fund, who collects the levy and manages it, and he told reporters that the official decree for the implementation of the new levy was still being processed.

He said that the palm oil levies collected by the fund this year will be 25 trillion rupiah, which is unchanged from last. (Reporting and writing by Bernadette Cristina Munthe; editing by John Mair, Michael Perry and Fransiska Naangoy)

(source: Reuters)