Indonesia to Optimize B35 to Cut Oil Imports and Emissions

The rising trend of oil prices in the world market has sounded alarm for Indonesia, which relies on fossil fuels import to fulfill 60 percent of its steadily-growing domestic demand of the fuel.  The situation thus shows the government was right in its policy to implement mandatory program of palm-based biodiesl, according to the Oil Palm Fund Management Board (BPDPKS) President Director Eddy Abdurrachman. In addition, it has bolstered the palm oil industry by stabilizing the price of palm oil.
Before the implementation of the biofuel mandatory program, Eddy said the country’s palm oil is very reliant on the export markets, which as a result palm oil prices are highly determined by foreign markets.  The program though needs quite a big amount of fund, which is derived from palm oil levies collected by BPDPKS.  Currently, most of the fund is used to finance development of biodiesel from palm oil.
The economic coordinating ministry’s Acting Deputy in charge of state-owned companies (BUMN), research and innovation coordination, Elen Setiadi said that the government’s biodiesel mandatory program has been continually upgraded in the last seven years from B15, a mixture of 15% palm oil and 85% diesel in 2015, to B20 in 2016, B30 in 2020 and B35 since February 2023.  Until June 30, the realized distribution of B35 reached 5.44 million kiloliters or 41.9% of the target set at 12.99 million kiloliters in 2023. Potential foreign exchange savings from the program is estimated at USD3.59 billion.  It also absorbed a total of 1.654 million workers and cut greenhouse gas (GHG) emission at 34.9 million MT of CO2e, according to Elen Setiadi.