PUTRAJAYA: Global palm oil prices are set to rise from at an average of RM2,200 per tonne as we implement and enforce B20 mandate throughout all sectors, said Indonesia’s deputy Coordinating Minister for Food & Agriculture as well as Economic Affairs Musdhalifah Machmud.
She said her government, while preparing to enforce on B20 nationwide implementation, is also embarking on trial runs for the B30 blend with automotive manufacturers.
“If the results prove to be favourable, Indonesia would like to raise the mandate further from B20 to B30, next year,” the Indonesian minister added.
Biodiesel usage in Indonesia is currently only mandatory for subsidised diesel users, of which other users cannot buy.
There are 19 biodiesel producers and 14 fuel retailers in Indonesia.
Musdhalifah explained, after 1st September 2018, Indonesian fuel stations will be prohibited from selling regular diesel fuel, once the new rules apply.
“If fuel companies are found selling unblended fuel, without any palm oil content, they will face penalty,” she told reporters here today after gracing the opening ceremony of Council of Palm Oil Producing Countries’ (CPOPC) seminar on good agricultural practices.
Indonesia is the world's biggest palm oil producer and exports some 35 million tonnes per year while Malaysia is second shipping out close to 20 million tonnes.
Collectively, Indonesia and Malaysia command more than 85 per cent of world's palm oil supply. As Indonesia sets a mandate on palm oil usage, with Malaysia's cooperation, it would have an impact on global pricing.
Last week, Indonesia President Joko Widodo, in a cabinet meeting, said he wanted an immediate implementation of Indonesia's biodiesel expansion programme to help save billions of dollars in diesel imports.
The B number indicates the percentage of palm oil biodiesel. That means B20 biodiesel is a blend of 20 per cent biodiesel and 80 per cent petroleum diesel.
Malaysia's Primary Industries Minister Teresa Kok, in her speech today, noted both Malaysia and Indonesia via the CPOPC should continuously put right misinformation on palm oil industry concerning wrong allegations of high indirect land use change (ILUC) and greenhouse gases (GHG) emissions.
“We must respond effectively to these wrong allegations with the correct scientific facts and figures about the palm oil sector,” she said.
“The CPOPC has a bigger task at hand now as importing countries such as the EU is wrongfully linking palm oil with false allegations of high ILUC and GHG emissions. CPOPC needs to collate the facts and figures to show the truth,” Kok added.
Kok’s speech today was read by her deputy, Shamsul Iskandar Akin.
Also present were Primary Industries Ministry secretary-general Datuk Zurinah Pawanteh, CPOPC executive director Mahendra Siregar and Belgian Ambassador to Malaysia Daniel Dargent.