Biodiesel to bolster Indonesia to not seek CPO price hike

Biodiesel to bolster Indonesia to not seek CPO price hike

Industry Minister Airlangga Hartarto after attending a discussion at the Industry Ministry in Jakarta on Tuesday (Mentari Dwi Gayati)

With high demand, we no longer need to 'beg' other countries to raise CPO prices.
Jakarta (ANTARA) - Industry Minister Hartarto Airlangga has forecast that the government’s intent to make 30 percent biodiesel blend (B30) mandatory in 2020 may impact the crude palm oil (CPO) prices in the global market.

"With high demand, we will no longer need to 'beg' in front of other countries to raise the CPO prices," he stated during a discussion held at the Industry Ministry in Jakarta on Tuesday.

The mandatory use of B30 will raise the domestic demand for CPO, so palm oil growers need not harbor concerns over a shortfall related to CPO prices in the global market due to oversupply, he stated.

Related news: Jokowi seeks to impose B30 policy

With a total annual production of 47 million tons, the use of CPO had continued to increase. Nearly 15-20 percent of the CPO production will be used for energy, while the rest will be diverted for downstream products, including food and non-food items, he stated.

Moreover, the domestic market for CPO has shown rapid growth in line with a rise in the consumption of food products. Moreover, the government has made the use of biodiesel mandatory through public service obligation and non-public service obligation schemes since 2016.

Airlangga stated that the Industry Ministry had conducted ongoing supervision of the implementation of the policy on the mandatory use of a 20 percent biodiesel blend (B20) that will be expanded to B30 in 2020.

It is expected that the portion of vegetable fuel will be increased to 50-100 percent biodiesel blend (B50-B100) by 2021-2022, he remarked.

The mandatory use of biodiesel has brought myriad benefits, including saving foreign exchange to import fuel oil, lowering greenhouse gas emissions, and averting a shortfall of CPO prices in the global market due to oversupply in 2015-2016.

Indonesia is one of the world's biggest producers of crude palm oil and crude palm kernel oil, with production estimated at 47 million tons in 2018.

Related news: Palm oil production adequate to produce B30 biofuel Related news: Lawmaker calls for serious implementation of biodiesel program

EDITED BY INE

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