[caption id="attachment_3278" align="aligncenter" width="1014"]
File Picture[/caption]
GFMM desk: On Monday Indonesia launched biodiesel with 30% palm-based fuel, the world's highest compulsory blend, to reduce its energy import bill and increase domestic palm oil consumption.
President Joko Widodo has said that the so-called "B30" biodiesel will reduce Indonesia's fossil fuel imports by 63 trillion rupiah ($ 4.5 billion) a year, saving 43.8 trillion rupiah in 2019 over current B20 fuel.
“This will improve our current account deficit and increase our import substitution,” Widodo said at the launch.
Indonesia, the world's largest palm oil producer and exporter, is gradually increasing its biodiesel bio content, with the aim of absorbing the growing supply of palm oil and trimming the cost of expensive fuel imports.
Since the end of 2018, there has been a mandatory 20% bio mix using fatty acid methyl ester (AFAM) made from palm oil of bodizol sold throughout Indonesia.
Indonesia on Monday said "Indonesia was recorded as the first country to implement the B30 in the world," noting that its use will be compulsory from January 1.
The program has already raised expectations of edible oil prices if forests are predicted to slow output due to drought.
The government has allocated 9.59 million kilolitres (KL) of FAME for the B30 mandate in 2020, up from 6.63 million KL this year.
Mr. Widodo said the program would also help Indonesia preserve a market for a vital commodity instead of depending on exports.
[caption id="attachment_3279" align="aligncenter" width="1014"]
File Picture[/caption]
The European Union concluded in March that palm oil deserted too much forest and planned to effectively set it as a transportation fuel. Indonesia has filed a complaint with the World Trade Organization.
"We will not depend on other countries that want to buy CPO (crude palm oil)," said Widodo. "If you didn't buy it, I could use it myself ... our bargaining position is stronger."
The use of the B20 is generally accepted for new vehicles. Proponents of higher mixing have rejected concerns raised by some industry groups that engine problems could be caused by using more foam, potentially increasing maintenance costs.
Indonesia aims to conduct road tests for biodiesel next year with 5% palm-based fuel, the minister said earlier this month.
Nick Vidawati, chief executive of state oil and gas company Partminar, says the B30 biodiesel is currently only available at a select gas station, but will be expanded to cover the whole of Indonesia within the next month.
Source: Online/SZK
Comment Now