Biodiesel will Save Palm Oil Industry

BIODIESEL mandatory program is believed to be a solution for palm oil industry that currently suffered loss following CPO price decline.

Biodiesel will Save Palm Oil Industry
BIODIESEL mandatory program is believed to be a solution for palm oil industry that currently suffered loss following CPO price decline. The government needs to create biodiesel demand as much as possible to absorb palm oil supply. “Currently, the sector that is available in terms of huge capacity is biodiesel program. More precisely, if there had been no biodiesel program, palm oil industry would have suffered more. Imagine if there were no biodiesel, there would be 4 million kiloliters unabsorbed CPO,” President Director of the Indonesian Oil Palm Estate Fund (BPDPKS) Dono Boestami said at a talk show on Berita Satu TV, Tuesday (27/11/2018). In his opinion, decision to temporarily halt CPO and its derivatives export levy will not affect biodiesel mandatory program as incentive fund disbursed by BPDPKS is still sufficient. “We should not worry about the fund as it is still sufficient, given the fact that the fund collected since 2015 is still available. We have surplus,” Dono said. To maximize use of biodiesel, the government is attempting to increase downstream activity. “We are boosting downstream activity. For example, PLN replaces fuel on its power plants with palm oil, not using biodiesel anymore. Pertamina is also attempting to produce green diesel,” Dono added. Biodiesel program is deemed necessary for palm oil industry since it can absorb palm oil production. Biodiesel domestic consumption is projected to reach 4 million kiloliters this year and it absorb about 4 million tons CPO. It is projected to reach 6 million to 7 million kiloliters next year. “It is for B20 only (fuel with 20% bio content). Under current rules we are going to implement B30 in 2020. Suppose the B30 mandatory program were sped up, starting from 1 January 2019, then there would be 3 million kiloliters more biodiesel.” ***