Area
Indonesia
Commodity Group
Biofuels
Commodity
Biodiesel
Date
01/05/2018
Policy Category
Renewable energy
Policy Instrument
Biofuel policy
Description
Decided to i) maintain subsidies to producers of palm oil-based diesel; ii) expand mandatory biodiesel use to the mining and railway sectors; and iii) uphold plans to further raise domestic admixture levels in the transportation and energy sectors in the coming years.
Notes
continue to enjoy government support in Indonesia. In 2018, producers of palm oil-based diesel are set to continue receiving subsidies, tied to government efforts to stimulate domestic demand for palm oil so as to prevent oversupply of the commodity and stabilize its price on the global market. According to media reports, official estimates place domestic biodiesel consumption at 3.06 million tonnes in 2018, compared to 2.24 million tonnes last year. Furthermore, next July, mandatory biodiesel use is set to be expanded to include the mining sector and a state-owned railway operator. Annual uptake by the mining and locomotive sector would amount to about 500 000 tonnes, while road transportation and power plants would absorb 2.55 million tonnes. Blending rates will range between 5 percent (locomotive), 10 percent (mining) and 20 percent (transport and energy sectors). Long-term plans to raise domestic admixture levels in the transportation and energy sectors to 30 percent are upheld. In the meantime, also exports of biodiesel may rise, following the recent elimination of the EUs anti-dumping duties on Indonesian biodiesel.
