By Bernadette Christina
JAKARTA (Reuters) -Indonesia expects its B40 biodiesel programme, aimed at reducing its reliance on imported diesel fuel, will reach full implementation next month after delays at the start of the year, energy ministry official Eniya Listiani Dewi said on Friday.
She said distribution of the palm oil-based biodiesel this year has reached around 1.2 million kilolitres as of Friday.
Indonesia had planned to launch the mandatory B40 mix, containing 40% of palm oil fuel, from January 1 but faced some delays due to regulatory issues and so fuel distributors were given until the end of February as a transition period.
The blending previously contained 35% palm oil.Eniya said there will be no extension to the transition period. “I think that everybody is making efforts to meet it,” she told reporters.
The implementation of Indonesia’s higher mandatory biodiesel blend is closely watched by palm oil market participants as they gauge how the demand from the energy sector may affect Indonesia’s palm oil exports.
Indonesia, the world’s biggest palm oil producer, has allocated 15.6 million KL of biodiesel for distribution in 2025, up from around 13 million KL last year.
The higher volume this year may require a higher subsidy which Indonesia provides for palm oil diesel production. To finance the expected higher subsidy the government plans to hike the export levy on crude palm oil to 10% from currently 7.5%.
The official decree to implement the new levy is still in process, Eddy Abdurrachman, chief executive of state plantation fund who collects and manage the levy, told reporters.
This year, the fund targets 25 trillion rupiah of palm oil levy collection, unchanged from last year, he said.
(Reporting by Bernadette Christina MuntheWriting by Fransiska Nangoy; Editing by John Mair and Michael Perry)
