Indonesia to increase palm oil content of biodiesel starting end-July
Indonesia has decided to increase the content of palm oil-based fuel in its biodiesel – known as B35 – to 35% from 30% starting July 20 in an effort to cut palm oil inventories. Senior energy ministry official Dadan Kusdiana said the ministry would also launch a road test for B40 fuel.
“While we wait for the result of the B40 road test, the government would implement B35,” Dadan said.
The implementation of B35 biodiesel would create additional demand for 727,804 KL of the palm oil fuel this year, taking the full-year consumption to 10.88 million KL. Its consumption up to July was estimated at 5.78 million KL.
Senior cabinet minister Luhut Pandjaitan this week estimated that an additional 2.5 million tonnes of palm oil could be absorbed if Indonesia implemented B40.
Major palm oil producer Indonesia has been drawing steady criticism from farmers due to the mounting stock of palm oil. Indonesia is in the midst of harvest season and has just ended a three-week export ban on palm oil in May, aimed at controlling domestic cooking oil prices.
Indonesia is also considering bringing down stock by lowering a palm oil export levy to spur exports.
