AreaIndonesia

Commodity GroupBiofuels

CommodityBiodiesel

Date01/08/2019

Policy CategoryRenewable energy

Policy InstrumentBiofuel policy

DescriptionAnnounced plans to increase the country’s mandatory biodiesel blending requirement to 30 percent in January 2020, and to 50 percent towards the end of that year. The planned shift would help to curb the nation’s energy imports and boost domestic palm oil uptake.

NotesLocal media confirmed that the Government is considering to further increase the biodiesel content of domestic transport diesel (see MPPU July’19). Reportedly, the mandatory blending rate could be increased to 30 percent next January (from 20 percent at present) and further to 50 percent towards the end of 2020. Besides contributing to efforts to curb the nation’s energy imports, the plans are aimed at boosting domestic palm oil uptake at a time of uncertain palm oil export prospects. The shift to B30 is estimated to require a more than 50% increase in domestic biodiesel production, potentially absorbing an additional 3.5 million tonnes of palm oil in 2020. Market observers pointed out that the anticipated level of domestic palm oil consumption could lead to shortages on the global market.