Indonesia’s plans to implement its 40% biodiesel blending (B40) programme could be delayed due to high palm oil prices, a senior government official told Reuters.
The country currently has a mandatory biodiesel programme with 30% palm oil content, known as B30, but had been planning to expand the use of the oil to save on fuel imports, according to the 26 August report.
Authorities had planned to increase the mix to 40% in July, but the timetable for the B40 programme was now unclear, Reuters wrote.
“We don’t have a timeline yet for B40, although from the technical side, we’re ready,” Dadan Kusdiana, a director general at the energy ministry, said in an interview. He said implementing B40 in 2022 would be “challenging”.
On the technical side, Kusidiana said the water and monoglyceride contents in fatty acid methyl esters (FAME) must be reduced for B40 to work, requiring new investment by biodiesel producers.
Indonesia funded its biodiesel programme with proceeds from palm export levies, the report said.
However, authorities had revised levy rules three times since last year in a bid to support the biodiesel programme after prices soared, but without hurting exports.
In January, the Indonesian Palm Oil Association (GAPKI) had said it expected B40 to be delayed beyond 2022.
Although biodiesel promises lower emissions, the use of palm oil as a feedstock raised concerns about deforestation in the clearance of land to grow it, according to the report, and the European Union was planning to phase it out as fuel for transport.