The news that Indonesia will make it mandatory for gasoil to have a blend of 25% biodiesel from 2019 from the current 20% was greeted with surprise and some optimism by Indonesian industry players on Friday.
Reuters in Indonesia reported that it had sent questions regarding the biodiesel blending mandate to the Indonesian Ministry of Energy and Mineral Resources and said on Thursday that Rida Mulyana, the Director of New and Renewable Energy at the Ministry responded with a text message that stated that the policy of blending 25% biodiesel into gasoil would begin in 2019.
The Indonesian Energy Ministry could not be reached Friday for confirmation of these remarks.
Togar Sitanggang, secretary general of APROBI (Asosiasi Produsen Biofuel Indonesia) said he was also surprised by the Ministry official's response as published by Reuters, and expressed hope there would be more clarification once energy minister Ignasius Jonan returns from an official trip to Copenhagen.
Greater blending would be beneficial for Indonesian PME producers and for overall palm oil demand, he added, but he could not comment on whether the Ministry official's statement would actually be implemented according to the stated schedule.
Increased biodiesel blending would be very welcome, said Fadil Hasan of GAPKI, the Indonesian CPO organization, because it would mean non-Public Service Obligation (non-PSO) demand would also come into the ambit of biodiesel blending.
Indonesia currently has a B-20 biodiesel blend for its Public Sector Obligation (PSO) fuel demand. This is funded through money collected by the Indonesian Estate Crop Fund. Adding non-PSO demand to the current PSO demand would almost double PME demand within Indonesia to almost 400,000 mt/month, say market watchers.
Discretionary blending of PME into gasoil is currently viable, said Hasan, because of high oil prices, so it would be easy for the government to fund a higher blend.
