AreaIndonesia

Commodity GroupBiofuels

CommodityBiodiesel

Date01/10/2013

Policy CategoryProduction

Policy InstrumentBlending rates

DescriptionImplemented mandatory 10 percent blending rate requirement.

NotesINDONESIA – biodiesel policy: In line with recent announcements, higher blending rates for diesel fuel have come into effect in October – see MPPU Sep.’13 for details. Under the new regulation, blending requirements will be mandatory rather than voluntary. In principle, the new 10% blending requirement for transportation fuel should drive annual biodiesel consumption for that type of use close to 1.8 million tons (compared to today’s estimated use of 0.6 million tons today, which remains well below the country’s official target). At that level, biodiesel production (for use in domestic transportation fuel) would absorb over 6% of annual palm oil output – up from 2–3% at present (and not counting biodiesel produced for other domestic uses and for export). The country’s currently installed production capacity – estimated at around 4 million tons – is said to be more than sufficient to meet the new domestic blending requirement.