Lang
Indonesia is set to begin road safety tests for its planned B50 biodiesel programme early next month.
According to a report by Bloomberg, Indonesia will start road safety tests for its planned "B50" biodiesel programme early next month. However, concerns are looming over a potential shortage of palm oil supplies.
Bloomberg reported: "The world's largest palm oil producer plans to raise the mandatory biodiesel blending rate from 40% to 50% by the second half of next year, in a bid to cut its hefty fuel import bill and reduce greenhouse gas emissions. The palm oil industry is closely watching the timing of Indonesia's rollout, as the programme is expected to absorb supplies that would otherwise be available for export, potentially triggering a global supply shortfall of palm oil and pushing up prices."
The Indonesian government is considering a partial rollout of the B50 programme limited to the public sector alone, given potential supply challenges, while the optimal blending rate for private sector use is studied in the meantime.
Meanwhile, Baginda Siagian, a palm oil official at the Ministry of Agriculture, said that to ensure supply stability, Indonesia will need to expand its palm oil plantations. The country currently has a moratorium in place suspending the conversion of forests into new plantations — a move that was necessary to slow the pace of large-scale deforestation and was welcomed by environmentalists.
Bloomberg quoted the official as saying on the sidelines of the conference, without elaborating further: "The Ministry of Agriculture plans to expand new palm oil plantations by 600,000 hectares, of which 400,000 hectares will be allocated to smallholders and the rest to state-owned companies, in order to meet growing domestic demand."