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Indonesia puts off 35% palm oil biodiesel blending rule to Feb. 1

Rise in biodiesel share aimed at cutting crude imports, greenhouse gasses

Indonesia will maintain its allocation of palm oil for domestic biodiesel at 13.15 million kiloliters next year, the government says.   © Reuters

JAKARTA (Reuters) -- Indonesia will start its mandatory 35% palm oil biodiesel blending program on Feb. 1, a month later than initially planned, the energy ministry said.

Indonesia will maintain its mandatory 30% palm biodiesel blending, known as the B30 program, throughout January, it said in a statement late Wednesday. The policy has been in place since 2020.

The start date for the B35 program was delayed "to ensure that supply, infrastructure, everything is ready," energy ministry director Edi Wibowo said on Thursday.

Indonesia will maintain next year's biodiesel allocation for domestic consumption at 13.15 million kiloliters.

"Total allocation is unchanged at 13.15 million kiloliters. The excess January allocation will be used if there is an increase in demand," Edi said.

The world's biggest palm oil producer has been planning to increase the use of palm-based fuel to reduce crude oil and fuel imports and cut its green house gases emissions, while maintaining palm oil prices.

The government has been running road tests for biodiesel with 40% palm oil since July 2022. The tests are scheduled to be concluded by the end of this year.

The government had initially planned to implement B40, but opted instead for B35 after considering crude palm oil availability, biodiesel production capacity and fuel specification standards, the energy ministry's director general of renewable energy Dadan Kusdiana said last week.

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