Indonesia Raises Palm Oil Export Levy to Boost Funds for Biofuels and Replanting Programs

The government of Indonesia increased the export levy on crude palm oil to 10% with effect May 17 from 7.5% to fund the biofuel program and replanting efforts.  Export levies of other palm oil product were also increased, according to a regulation issued by the finance ministry. This included 9.5% on crude palm olein from 6%, refined bleached and deodorized palm olein at 7.5% from 4.5%, and biodiesel at 4.75% from 3%.

The regulation is expected to increase revenue for Indonesia’s plantation fund management agency, BPDP, which uses most of the funds to support the country’s expanded biodiesel program and replanting project. Indonesia increased the blending mandate of palm-based biodiesel in gasoil to 40 percent in January. Only about half of the biodiesel allocation this year will be subsidized as higher palm oil prices have made the program more costly.