This followed plans to make biodiesel use mandatory.
Indonesia plans to determine a 20% Biodiesel blend (B20) on a national scale as of September 2018. In 2015, Indonesia introduced rules to make B20 mandatory in subsidized biodiesel up to January 2020. Under the new plan, all diesel consumers, including power plants and railways, would be required to use B20. The measure is expected to reduce crude oil and oil product imports (around 400,000 bbl/d each), saving US$6b on its import bill.
The bio component that will be used in the blend is called fatty acid methyl esters (FAME) and is made from palm oil. Indonesia is the largest producer of palm oil, whose output has increased by 35% since 2013. Only 25% of FAME production capacity is at use and the mandatory B20 will raise this usage to 50%. The government plans to provide incentives to biodiesel producers (no further detail so far).
A higher blend (B30) is expected to become mandatory, raising concerns about engine performance in the automobile industry; vehicles on biodiesel consume 4% more fuel according to a 2015 study.
This article was originally published by Enerdata.
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