JAKARTA – The Indonesian government will start implementing the biodiesel 35 percent (B35) program by the end of July 2022. It is believed to help push up the price of fresh fruit bunches (FFB) which has been weakening recently.
The Indonesian Palm Oil Association (GAPKI) Secretary General Eddy Martono said that the policy of mandatory biodiesel program will increase the absorption of crude palm oil (CPO) from growers, especially the smallholders, amid the concern of abundant supply of CPO after the export ban policy.
“It can also help increase the price of FFB from smallholders,” Eddy told Kontan.co.id on Friday, 08 July 2022.
Eddy said that the B35 policy will at least boost positive sentiment in the market as it will drive up the local demand of CPO for the production of biodiesel 35 percent.
The New and Renewable Energy and Energy Conservation Director General Dadan Kusdiana said that the implementation of B35 program is expected to increase the local absorption of palm oil.
“The government has decided to implement the B35 program based on consideration that the national industry of palm oil is weakening due to declining price of CPO. By implementing the B35 program, the CPO absorption will rise and the price of FFB from growers will also rise,” Dadan said at the office building of the ministry of energy and mineral resources (MEMR) on Thursday night.
Dadan said that actually a laboratory test had been conducted for B40 program. But despite the fact, the biodiesel program will be implemented in stages with the initial step of the B35 program.
The government has ensured that it will not yet implement the B40 program this year. “But a number of tests and assessments will be conducted continually for the B40 program,” he said.
Previously, Maritime and Investment Coordinating Minister Luhut Binsar Panjaitan said that the government has been continually trying to push up the price of the FFB from growers. “We’re still facing some problems in the upstream and the realization of palm oil exports still needs some time. But it will be soon progressing well and the price will be going up. I’ve also talked to the finance minister to cut the palm oil export tax to incentivize the palm oil exports,” he said when addressing the national conference of the association of palm oil producing regencies in Jakarta recently. (*)
Source: KONTAN.CO.ID
