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Indonesia to increase palm oil-based fuel in its biodiesel to 35% to reduce inventory

Senior Energy Ministry official Dadan Kusdiana said Friday (July 8) that Indonesia plans to use 35% palm oil-based fuel in its biodiesel in the future (B35). In addition, trials are to be conducted on B40 i.e. biodiesel with 40% palm oil-based fuel.

“While we wait for the result of the B40 road test, the government would implement B35,”

said Senior Energy Ministry official Dadan Kusdiana.

Indonesia has struggled with rising inventory since its three-week export ban was lifted in May. The high inventory is depressing prices, angering farmers who are in the middle of the harvest season. The government had imposed an export ban on palm oil in April to control domestic prices for cooking oil.

According to Dadan, this is expected to increase the demand for palm oil fuel by an additional 727,804 KL which would mean a total consumption for this year of 10.88 million KL. If the B40 trials are successful and implemented, an additional 2.5 million tons of palm oil would be consumed, according to Luhut Pandjaitan, a senior cabinet minister.

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