Govt ups biodiesel blend, prepares incentives
Tuesday, March 17 2015 - 01:17 AM WIB
The government plans to increase the mandatory biodiesel mix in automotive diesel to 15 percent this year from the current 10 percent, said Minister of Energy and Mineral Resources Sudirman Said.
Sudirman said that the mandatory biodiesel blend would further increase to 20 percent going forward.
He said on Monday that the increase in the biodiesel mix in automotive diesel would help reduce import of petroleum fuel, and in turn would help ease pressure on the rupiah, which has dropped significantly against the value of the US dollar.
Meanwhile, Director General of New and Renewable Energy, Rida Mulyana said that the government plans to provide incentives for producers of fatty acid methyl ester (FAME), which is used in biodiesel production, to support the planned expansion of the mandatory biodiesel blend.
He was quoted as saying that the objective is to help reduce the production cost of FAME either by regulating domestic CPO price (material for FAME production), or providing subsidy, either taken from the fixed subsidy in the price of automotive diesel or from proceeds of CPO export tax.
As many as 5.3 million kiloliters of biodiesel will be needed to support the 15 percent mandatory blending, Rida said. The Indonesian Palm Oil Producers Association (GAPKI) said that the country produced about 31.5 million tons of CPO last year. Indonesia is the world?s largest CPO producer.
Editing by Reiner Simanjuntak