Biodiesel Mandatory 30% Could be a Solution to CPO Surplus

PRESIDENT Director of Indonesian Oil Palm Estate Fund (BPDPKS) Dono Boestami said that government may accelerate the use of fuel with 30% biodiesel content (B30 biofuel) in order to whittle down the country’s surplus of crude palm oil (CPO). “Furthermore, as Minister of Energy and Mineral Resources (Ignasius Jonan) said, it is possible to accelerate up to 100%, but after passing tests,” Dono said as quoted by Bisnis.com (15/7/2018). In his opinion, CPO consumption for biodiesel would be a crucial factor in supporting the industry players regarding tariff and export duties on several CPO product derivatives such as cooking oil. “The problem is not about (export) tariff, but we are also redressing the balance between CPO supply and demand.

Biodiesel Mandatory 30% Could be a Solution to CPO Surplus
PRESIDENT Director of Indonesian Oil Palm Estate Fund (BPDPKS) Dono Boestami said that government may accelerate the use of fuel with 30% biodiesel content (B30 biofuel) in order to whittle down the country’s surplus of crude palm oil (CPO). “Furthermore, as Minister of Energy and Mineral Resources (Ignasius Jonan) said, it is possible to accelerate up to 100%, but after passing tests,” Dono said as quoted by Bisnis.com (15/7/2018). In his opinion, CPO consumption for biodiesel would be a crucial factor in supporting the industry players regarding tariff and export duties on several CPO product derivatives such as cooking oil. “The problem is not about (export) tariff, but we are also redressing the balance between CPO supply and demand. Once we reach our balance, CPO price would increase itself,” Dono said. Indonesia palm oil industry is having production surplus. According to Indonesian Palm Oil Association (Gapki), CPO production in May totalled 4,24 million tons up 14% from 3,72 million tons on April. The total production of May raised Indonesian CPO stocks up to 4,76 million tons form 3,98 million tons on April. Dono said, the surplus was boosted by a decrease in CPO export due to high tension of global market condition. “Global demand for CPO has decreased. India raised import tax on palm oil product, while Europe plans to limit palm oil-based biodiesel and US has followed the Europe’s path. We have to seek new market to absorb the surplus.” According to Dono, Indonesia`s total annual installed biodiesel production capacity reached 30% or produce only 3,5 million kiloliters. This means domestic biodiesel production is possible to increase, moreover with CPO surplus. ***