Biodiesel Incentives Projected to be Lower This Year

BIODIESEL incentives disbursement by the Indonesian Oil Palm Estate Fund (BPDPKS) until the end of this year is projected to be lower, at around Rp6 trillion to Rp6,5 trillion, than initial target at Rp7.47 trillion. In a hearing session with Commission IV of the Indonesian House of Representatives di DPR Building, Wednesday (5/12/2018), BPDPKS Fund Distribution Director Edi Wibowo revealed that biodiesel incentives disbursement was lower than the target because of low price of biodiesel and high price of diesel fuel. Incentives are disbursed by BPDPKS to biofuel companies to cover the differential between diesel fuel Market Index Prices (MIP) and biofuels MIP.

Biodiesel Incentives Projected to be Lower This Year
BIODIESEL incentives disbursement by the Indonesian Oil Palm Estate Fund (BPDPKS) until the end of this year is projected to be lower, at around Rp6 trillion to Rp6,5 trillion, than initial target at Rp7.47 trillion. In a hearing session with Commission IV of the Indonesian House of Representatives di DPR Building, Wednesday (5/12/2018), BPDPKS Fund Distribution Director Edi Wibowo revealed that biodiesel incentives disbursement was lower than the target because of low price of biodiesel and high price of diesel fuel. Incentives are disbursed by BPDPKS to biofuel companies to cover the differential between diesel fuel Market Index Prices (MIP) and biofuels MIP. ”The trend has been declining since September, and continued on October, and November. Diesel fuel price increased while biodiesel price decreased so that there’s no price gap,” Edi said. According to him, as of 31 October 2018, BPDPKS had disbursed Rp5.88 trillion of Rp10.99 trillion in total allocation of palm oil fund for this year. About Rp5.32 trillion of them had been disbursed for biodiesel incentives. BPDPKS had also disbursed Rp341.31 billion of Rp2.34 trillion in allocation for funding replanting program; for research Rp25.67 billion of Rp213.36 billion in allocation; for facilities and infrastructure Rp289.74 million of Rp213.36 billion in allocation. In addition, oil palm fund disbursement for promotion and partnership program made up Rp21.1 billion of Rp213.36 billion in allocation; for human resources development Rp15 billion of Rp213.6 billion in allocation; and disbursement for supporting activities included surveyor, fund management, and supporting management made up Rp160.27 billion of Rp324 billion in allocation. BPDPKS recorded that incentives disbursement on September reached Rp360.033 billion. Then, it declined to Rp335.298 billion on October, and declined again on November to Rp268.073 billion. For December disbursement it is projected to decline to Rp87.297 billion. The incentives disbursed by BPDPKS have decreased Rp2,074 per liter at average. Last year, paid incentives were Rp4,075 per liter at average. BPDPKS aims to disburse incentives at around Rp7 trillion next year. “With the same allocation, there will be more biodiesel to be incentivized to around 6 million kL in 2019,” Edi said. ***