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View all search resultsB50 policy to trim CPO exports by 5.3m tonnes, minister says
The government is getting in gear to launch its B50 biofuel program as part of the wider energy and food agenda, reducing exports and potentially putting the country on a footing to dictate the global CPO market.
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Bottles containing samples of different biodiesel blends stand on a table on June 13, 2019, during the Energy and Mineral Resources Ministry’s launch event for the 30 percent biodiesel blend (B30) in Jakarta. (esdm.go.id)
T
he government’s upcoming mandate for the B50 biodiesel blend, containing 50 percent palm oil, could slash crude palm oil (CPO) exports by up to 5.3 million tonnes, according to Agriculture Minister Andi Amran Sulaiman.
The policy, set to take effect next year, is designed to curb diesel imports while boosting domestic palm oil absorption.
Speaking at a press conference on Thursday at the State Palace in Central Jakarta, Amran said the country currently produced around 46 million tonnes of CPO annually.
Of this amount, 20 million tonnes were processed domestically while 26 million tonnes were exported, he said.
“B50 will require 5.3 million tonnes of CPO. We will withdraw 5.3 million tonnes from exports and convert it into biofuel to replace [fossil] diesel. In this way, our green energy program can meet domestic needs while saving foreign exchange [reserves] by reducing fuel imports,” the minister said.
Amran added that reducing exports of the commodity would likely push up global CPO prices and might ultimate benefit local producers.
He estimated that the value of Indonesian CPO, which currently stood at Rp 450 trillion (US$35 billion), could rise to between Rp 800 trillion and Rp 1 quadrillion on potential strengthening of global prices, citing past instances when prices doubled.
