The Indonesian government is targeting to increase the use of palm oil biodiesel in diesel fuels from an estimated 2.53 million kiloliters (kl) in 2017 to about 3.5 million kl in 2018 — an increase of 38%, by including the mining sector.
The subsidy for the program known as B20, which refers to a 20% biodiesel blend, has previously only been available to the power sector and to fuels sold to the public by state-owned PT Pertamina and publicly listed Indonesian company AKR Corporindo.
Details of the subsidy’s implementation are still being discussed, but it is expected to take effect this year. Subsidies are periodically set based on the price of crude palm oil and crude oil.
The subsidy to the mining sector may be capped at INR 4,000 (USD 0.30) per liter, said Rida Mulyana, director general of renewable energy at Indonesia’s Ministry of Energy and Mineral Resources.
“By considering funds available … for the time being we will intensify the use of biodiesel in the mining industry,” said Mulyana.
The government is required to revise a presidential regulation that governs how palm oil funds are managed in order to implement this change.