B35 Program Implementation Faces Challenges

The implementation of the B35 biodiesel policy has encountered obstacles. Apart from ongoing challenges related to raw material availability, there is a growing concern regarding the widening disparities between the market index price (HIP) of B35 biodiesel and that of diesel oil.

Stepanus I Nyoman A. Wahyudi

29 Apr 2024 - 15.01
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B35 Program Implementation Faces Challenges

Utilizing biofuel derived from palm oil, specifically biodiesel, is a strategic move by the government aimed at diminishing Indonesia's reliance on oil imports. Bisnis-Dok. Kementerian ESDM

Bisnis, JAKARTA — The introduction of biodiesel B35, a biofuel derived from palm oil, since February 1, 2023, serves as a crucial step for Indonesia in promoting the adoption of cleaner energy sources. This initiative has witnessed a growing trend in the consumption of diesel fuel blended with 35% palm oil-based biofuel each year. In addition to curbing greenhouse gas emissions by an estimated 132 million tons of CO2 equivalent through the use of 12.3 million kiloliters of B35 in 2023, the government has also achieved significant cost savings of IDR 122 trillion by reducing imports of diesel and crude oil.

The B35 program is expected to yield benefits for both crude palm oil (CPO) entrepreneurs and businesses engaged in biodiesel fuel and biofuel production. However, the implementation of the B35 biodiesel policy has encountered obstacles. Apart from ongoing challenges related to raw material availability, there is a growing concern regarding the widening disparities between the market index price (HIP) of B35 biodiesel and that of diesel oil.

The Ministry of Energy and Mineral Resources (ESDM) anticipates that the incentive amount for Biodiesel B35 this year will likely surpass the previous year's realization due to the increasing disparity in the HIP between the two fuels.

"Therefore, we anticipate that the incentives for Biodiesel in 2024 will be higher than those in 2023," stated Dadan Kusdiana, Secretary General of the Ministry of ESDM to Bisnis, quoted Sunday (28/4/2024).

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