JAKARTA (TheInsiderStories) – Energy and mineral resources (EMR) ministry appoints 18 biofuel producers to carry out a mandatory policy of a biodiesel mixture program of the type of fatty acid methyl ester (FAME) as much as 30 percent into fuel oil (B30) in 28 locations across the nation. Indonesia wants to implement the program starting 2020.
The companies are PT Sinarmas Argo Resources and Technology Tbk (IDX: SMAR), PT Sinarmas Bio Energy, PT Batara Elok Semesta Terpadu, PT LDC Indonesia, PT Tunas Baru Lampung Tbk (IDX: TBLA), PT Ciliandra Perkasa, PT Darmex Biofuels, PT Cemerlang Energi Perkasa, PT Bayas Biofuels, and PT Kutai Refinery Nusantara.
Then, PT Pelita Agung Agrindustri, PT Pertama Hijau Palm Oleo, PT Intibenua Perkasatama, PT Sukajadi Sawit Mekar, PT Musim Mas, PT Multinabati Sulawesi, PT Wilmar Bioenergi Indonesia, and PT Wilmar Nabati Indonesia.
The producers had signed a contract with state-owned energy company, PT Pertamina, which received an assignment from the government for the distribution of B30. The contract has term in one year period.
The implementation of B30 will effective from Jan. 1, 2020 in Medan, Dumai, Siak, Kabung, Plaju, Panjang, Tanjung Gerem, Bandung Group, Tanjung Uban, Jakarta Group, Cikampek, Balongan, Tasikmalaya Group , Cilacap Group, Semarang Group, Tanjung Wangi, Surabaya, Tuban, Boyolali, Rewulu, Bitung, Balikpapan Group, Kasim, Kotabaru Group, Makassar, Manggis, Kupang, and Pontianak.
The ministry said, the presence of the B30 mandatory program will provide many benefits, such as meeting the government’ commitment to reduce emissions by 29 percent in 2030, increasing energy security and independence, stabilizing crude palm oil price (CPO) prices, support the downstream palm oil industry, meeting 23 targets renewable energy contribution to the total energy mix in 2025, and to reduce fuel consumption and imports.
According to vice presiden Ma’ruf Amin, the implementing of B30 will absorb 3 Million Tons (MT) of CPO in 2020. He asserted, that the government was ready to carry out concrete steps to improve the management of the palm oil industry, especially to supply the domestic needs. So far, he said, the mandatory policy of B20 has absorbed more than 4 MT CPO.
He predicting the number will increase to 6.4 million tons of palm oil by the end of the year. And, next year, he asserted, by implement B30 the industry could absorb around 10 MT of CPO throughout 2020.
Amin revealed that there are three steps that must be taken by the government, businesses and farmers to increase the productivity and competitiveness of Indonesian palm oil internationally namely land productivity, certification to ward off negative campaigns, and develop downstream project.
Previously, the government targeting the implementation of B30 starting October this year and B100 in five years. Recently, said the officials, that B30 was still in the testing phase. The government sees the use of B30 will reduce diesel consumption by up to three million kiloliters.
The B30 will free the country from the pressure of major European countries on palm oil, he adds. Beside, the government is also preparing an investment to produce B100 or green diesel which is targeted to begin within the next five years. The B100 program is expected to reduce diesel consumption by up to seven million kiloliters.
Month ago, President Joko Widodo has announced that he wants the country accelerates the mandatory B30 and expecting to save US$5.5 billion per year in fuel imports.
Based on the EMR ministry data, from January to July, the country consumed around 2.95 million kiloliter of FAME. The country hopes to consume 6.2 million kiloliters of FAME over the full year and 9.6 million kiloliters in 2020.
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