Indonesia, Malaysia commit to biodiesel mandates despite higher prices


Releads, adds Malaysian minister, quotes, background from paragraph 3 onwards

JAKARTA, March 24 (Reuters) - Top palm oil producers Indonesia and Malaysia remain committed to their mandatory biodiesel programmes despite higher prices of the feedstock to reach green energy goals, senior officials said on Thursday.

Indonesia and Malaysia use palm oil as blending for biodiesel, with Indonesia since early 2020 using a mandatory B30 - a biodiesel containing 30% of palm-based fuel - the highest mandatory mix in the world, to slash imports of diesel fuel.

Indonesia's palm-based fuel programme "will not stop at B30", Coordinating Minister for Economic Affair Airlangga Hartarto, told a virtual industry conference.

He said Indonesia was working to use palm oil in its diesel fuel, gasoline, and jet fuels.

Indonesia is currently running test flights using jet fuel mixed with palm oil and conducting various trials to use it to produce other fuels, as well as planning road tests on a 40% palm-based biocontent.

"Commitment of using palm as biofuel material will boost Indonesia to achieve energy security and a (renewable) energy mix target of 23% by 2025," Airlangga said.

Renewables currently make up about 11% of Indonesia's energy mix.

Airlangga also called for stronger collaboration between palm oil producing countries to coordinate their biodiesel programmes.

Rival Malaysia is also committed to maintaining and expanding its own biodiesel programme after pandemic-related delays, its Plantation Industries and Commodities minister, Zuraida Kamaruddin, said at the same event.

"Despite the high price of palm oil the government is committed to maintain the biodiesel blending ratio and planning to introduce the high blend of biodiesel, like the B30, later," she said.

Malaysia's palm oil benchmark FCPOc3 has gained about 30% so far this year amid sluggish output from the two top producers, Indonesia's earlier export restrictions and impacts of the war in Ukraine.

Malaysia plans to implement its nationwide adoption of the B20 (20% palm oil component) palm oil biofuel programme by the end of 2022, its palm oil board said in January.

The mandate to manufacture B20 for the transport sector was introduced in January 2020 but delayed by coronavirus movement curbs.

(Reporting by Bernadette Christina Munthe Writing by Fransiska Nangoy Editing by Ed Davies, Martin Petty)


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