Indonesia ‘Determined’ to Roll Out its B40 Mandate

Indonesia will likely charge ahead with its biodiesel mandate, which will keep palm oil prices elevated this year as supply in the market shrinks, said RHB Research, reported in The Edge Malaysia on March 25.  The government appears ‘determined’ to roll out its B40 program, the research house said, following a meeting with the Indonesia Biofuel Producer Association. 
Indonesia’s implementation of B40 is closely watched, as the program is expected to soak up rising supply from the country.  Indonesia is collecting levies on palm oil to subsidize producers and bridge the price gap between biodiesel and fossil fuel. It is also set to raise a levy on crude pam oil from 7.5% currently to 10%, which RHB Research said is sufficient to subsidize the program, as long as gas oil stays above USD57 per barrel.