Indonesia: B40 biodiesel plan delayed again on high CPO prices

  • The Energy and Mineral Resources Ministry will delay the implementation of a mandatory 40% palm oil-based biodiesel (B40) policy in 2022 to “prioritize stability” amid rising crude palm oil (CPO) prices.
  • Energy Minister Arifin Tasrif said on 24 Mar 22 that the government would continue its B30 policy – of 30% palm oil-based biodiesel – in 2022 and would devise solutions to maintain the price gap between CPO and biodiesel prices.
  • “Technically, B40 is ready to be implemented. We are reviewing whether we’re ready to produce more CPO,” Arifin told reporters in Yogyakarta.
  • The B40 biodiesel program was slated for implementation in Jul 21 following the success of the B30 program in 2019, but it was delayed by a year as high CPO prices had made the fuel uneconomical. The ministry had planned to conduct a five-month B40 trial starting in Feb 22.
  • Arifin claimed the government was still committed to escalating the biodiesel policy. As of 28 Mar 22, CPO prices had risen 27.5% ytd to reach MYR6,578 per ton.
  • The government hopes that increasing the proportion of processed CPO in biodiesel will help limit petroleum imports. Indonesia has long been one of the world’s largest importers of fuel, both in the form of crude oil and gasoline.
  • Arifin added that in 2021, the B30 program had reduced greenhouse gas emissions by an estimated 25 million tons and that the government was studying the technological, economic, regulatory and supporting industry aspects of implementing B40.
  • The Association of Indonesian Automotive Manufacturers (Gaikindo) suggested that the government begin implementing the mandatory B40 policy in 2025, considering automotive manufacturers needed at least 36 months to develop and commercialize vehicles that ran on B40 fuel.

External Link :