Detail

Indonesia

Biofuels

Palm oil-based biodiesel

01/01/2021

Renewable energy

Bioenergy policies

Confirmed that, in 2021, funding allocated to the biodiesel subsidization programme would increase by 75 percent compared with 2020. The planned funding level assumed no change in the country’s standing 30 percent blending mandate – as opposed to original plans to shift to a 40 percent rate in 2021.

INDONESIA – biodiesel policy: From the proceeds of the export levy collection, in 2021, the Government plans to allocate IDR 49.1 trillion (USD 3.39 billion) to its biodiesel subsidization scheme – up 75 percent from last year’s allocation. The amount earmarked for biodiesel subsidies rests on a biodiesel consumption forecast of 9.59 million kiloliters, up one-third from last year’s COVID-19 affected level – assuming no change in the country’s current 30 percent blending mandate (see MPPU Jan.’21). The amount of biodiesel subsidized depends on the prevailing price difference between palm oil methyl ester, the primary feedstock for Indonesian biodiesel production, and regular diesel, which rose to around USD 400 per tonne in 2020 (compared to the USD 100–150 gap recorded in previous years). With respect to the country’s blending mandate, the Indonesian’s Palm Oil Association (GAPKI) pointed out that government plans to roll out the 40 percent blending requirement could be delayed beyond the end of 2022.