Area
Indonesia
Commodity Group
Biofuels
Commodity
Biodiesel
Date
01/07/2020
Policy Category
Renewable energy
Policy Instrument
Bioenergy policies
Description
From July 2020 to August 2020: Stated that policies to further raise domestic biodiesel consumption were on track, with mandatory sales of B40 i.e. diesel blends containing 40 percent of palm oil-based biofuel scheduled for July 2021. Reportedly, different from the currently available B30 blends, which contain 30 percent of fatty-acid-methyl-ester (FAME), B40 biodiesel would combine 30 percent of FAME with 10 percent of renewable diesel derived from palm oil using hydro-treatment a formula preferred for its higher cetane value that makes it more suitable for vehicle engines.
Notes
INDONESIA biofuel policy: Contrary to recent statements that the planned shift to 40 percent mandatory blending of biodiesel into regular diesel (B40) would be postponed to 2022 (see MPPU July20), in July, the Indonesian Government announced that policies to raise the national blending mandate were back on track, with B40 implementation scheduled for July 2021. Reportedly, the gradual recovery in mineral oil prices contributed to the change in plans, as it helped improve the competitiveness of palm-oil based biodiesel. Indonesias biofuel policy is aimed at absorbing a growing share of domestic palm oil production, while reducing the countrys GHG emissions and cutting diesel fuel imports. On a separate note, in August, a Finance Ministry official stated that further increases in the countrys palm oil export levy to support the governments biodiesel programme could not be excluded in the future. Furthermore, official sources reiterated that different from B30 biodiesel, which contains 30 percent of fatty-acid-methyl-ester (FAME) B40 biodiesel would combine 30 percent of FAME with 10 percent of renewable diesel derived from palm oil using hydro-treatment (see also below). The new formulation, which entails higher production costs, is said to be more suitable for vehicle engines due to a higher cetane value. Blends with FAME content above 30 percent faced resistance from car makers, as such fuels require special handling and equipment, can corrode engine gaskets, and tend to solidify at low temperatures.
