KATADATA - Implementation the B20 biodiesel fuel program this year has been slow. According to the Ministry of Energy and Mineral Resources, only 222,455 kilolitres (kl) of biodiesel was distributed in January 2016, or 41.7 percent of the target 533,000 kl. Distribution of non-subsidised biodiesel was even lower, at just 37,049 kl.
The Directorate General of New Renewable Energy and Energy Conservation believes that this because biodiesel twice the price of conventional diesel. This is one reason that many consumers, including mining companies, are reluctant to use biodiesel (Read: Government to Continue Biodiesel Program Amid Oil Price Decline)
Also, biodiesel is not widely available as there are no incentives for business to trade in non-subsidised fuel, the licensing procedures are complicated, and there is little regulation and control of the trade. (Read: Association Asks Government to Review Biodiesel Program Amid CPO Price Decline)
B20 is diesel fuel that contains 20 percent palm oil (fatty acid methyl ester)-based biodiesel and 80 percent petroleum diesel. The government began accelerating the use of palm oil for biodiesel since 2006. By law, motor vehicles should be using B20 from 2016, and the power sector should be using B30 from January 2016. (Read: Biodiesel Program Cuts Fuel Import by 6.9 Million Kiloliters)
The B20 programme will help the Indonesian government meet its international commitment to reduce emissions by up to 41 percent. It will also contribute to national energy security by reducing fuel imports and foreign exchange savings. (Econographic: Government to Boost Biodiesel Absorption in 2016)
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