Application Of Biodiesel B35 Expected To Boost Palm FFB Prices

Photo Illustration ANTARA

JAKARTA - Founder and Executive Director of the Palm Oil Agribusiness Strategic Institute (PASPI), Tungkot Sipayung appreciated the government's steps to implement the 35 percent biodiesel program (B35).

It is known, the government plans to implement blending of 35 percent biodiesel by the end of July 2022.

He assessed that the B35 Biodiesel program is expected to be able to increase the price of fresh fruit bunches (FFB) for palm oil which has recently fallen.

"The government plans to absorb the surplus by implementing the B35 Biodiesel policy. This is a cool and creative solution," said Tungkot in Market Review, Tuesday, July 12.

Tungkot added that currently the Indonesian palm oil industry is not doing well. At the farm level, the price of FFB fell drastically and in contrast to Malaysian farmers who enjoy high prices.

According to him, the government must accelerate the implementation of this program so that it can absorb domestic crude palm oil (CPO) stocks which are estimated to have reached 8 million tons at this time.

"If we can do it sooner, the better because our storage tanks can't hold the CPO for too long, it will be damaged. And what's most important is that we must remove the smallholders' palm oil immediately. They have suffered recently because of the drop in FFB prices," continued Tungkot.

Regarding the readiness of CPO producers, Tungkot said, the capacity of the domestic biodiesel industry is quite large, namely 17 million kilo liters.

Meanwhile, what is needed to make B35 Biodiesel is only 12-13 million KL, so Indonesia still has room to increase B30 production.

"Even if the government or biodiesel producers want to take advantage of the opportunity to export biodiesel to the international world, which is currently attractive, it is still very possible," he concluded.

As previously reported, the Ministry of Energy and Mineral Resources (ESDM) plans to implement the use of biodiesel with a blend of 30 percent palm oil (B30) into a mixture of 35 percent palm oil (B35) by the end of July 2022.

Director of Bioenergy at the Ministry of Energy and Mineral Resources, Edi Wibowo, said that his party was finalizing the specifications for the B35 and B40 trials.

"From all raw materials, it is sufficient. The biodiesel industry itself has reached 17.14 million kiloliters (KL). It is sufficient and hopefully it can work," said Edi at the Energy Corner, Monday, July 11.

In terms of regulation, Edi said, there were no significant changes because biodiesel would still use existing regulations.

However, his party is also working on regulations at the ministerial decree level which will regulate the percentage of biodiesel mix flexibly.