Indonesia may revive B50 biodiesel mix plan as oil prices soar
A worker of a petrol station of the state-owned company Pertamina fills a motorcycle with subsidised fuel in Jakarta, Indonesia on Aug 22, 2022. (File photo: Reuters/Ajeng Dinar Ulfiana)
JAKARTA, March 9 : Indonesia may revive a plan to launch a mandatory B50 grade of palm oil-based biodiesel in the middle of this year because of surging crude oil prices due to the conflict in the Middle East, deputy energy minister Yuliot Tanjung said.
No decision has been made yet by Indonesia, the world's largest palm oil producer, Yuliot added in comments sent to Reuters over the weekend.
In January, authorities scrapped a plan to launch B50 - a blend of 50 per cent palm oil-based biodiesel and 50 per cent conventional diesel - this year due to technical and funding concerns, instead sticking with a B40 blend.
In light of the U.S.-Israeli war on Iran, however, the government is now looking at two scenarios, Yuliot said.
"B50 might be implemented in the second semester or even earlier...But for now the steering committee's decision for B40 until the end of 2026 still stands," he said, adding that authorities were monitoring price movements in real time.
The steering committee consists of several ministries which determine biodiesel policy, led by chief economic minister, Airlangga Hartarto.
Indonesia's biodiesel mandate often affects global palm oil prices as increased domestic use reduces available exports.
Oil prices surged on Monday to above $100 per barrel [O/R]. Palm oil prices also rallied on expectations that rising crude prices will boost demand for biodiesel feedstocks.
Yuliot did not respond to a request for further comment on Monday. Energy minister Bahlil Lahadalia said the government may accelerate its biofuel programmes, which include B50 and a plan to require a certain blend of bioethanol with gasoline, according to local media reports.
Asked about potential implementation of B50 this year, Airlangga told Reuters that authorities were monitoring the impact of the conflict on biodiesel policy.
Finance minister Purbaya Yudhi Sadewa said Indonesia is prepared to raise the allocation for fuel subsidies to absorb the shock from rising global oil prices.
