Indonesia to Discuss How to Continue Biodiesel Programme amid Falling Fuel Prices

Date: 2020.05.27

Indonesia's ministry of economic affairs is set to discuss how the country will continue its ambitious biodiesel programme, a ministry official told Reuters on Wednesday.

The economic affairs ministry was scheduled to meet on Wednesday to decide the government's next moves to ensure the continuity of a mandate which requires biodiesel to have 30% bio-content (B30) made from palm.

Indonesia started unrolling an ambitious biodiesel programme in late 2018, with the aim of soaking up excess supplies of palm oil and curb expensive fuel imports, a big contributor to the country's persistent current account deficits.

However, a historic crude oil rout this year has made palm oil - of which Indonesia is the biggest producer - less attractive for biodiesel feedstock.

Indonesia is targeting biodiesel consumption of 14.2 million kilolitres (KL) in 2022, more than double the 6.26 million KL in 2019, but Maritime and Investment Affairs minister Luhut Pandjaitan admits going beyond B50 will be difficult without higher CPO production.

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