Indonesia spent more on biodiesel subsidies than funds collected in 2020 – Successful Farming

JAKARTA, Dec 17 (Reuters) – Indonesia spent more on
biodiesel subsidies than funds it collected through export
levies this year, Eddy Abdurrachman, president director of the
country’s Estate Crop Fund (BPDP) said on Thursday.

BPDP, the government body in charge of subsidising
Indonesia’s palm oil programmes, estimated 17-18 trillion rupiah
had been raised from levies this year, while 25.7 trillion
rupiah ($1.82 billion) had been spent subsidising the price
difference between crude oil and palm oil, he said.

“In 2020… crude oil price tended to go down, while crude
palm oil trend is going up, so that there’s this price gap that
BPDP should bear,” he told a virtual conference.

Indonesia makes it compulsory for its diesel to be blended
with 30% biocontent made out of palm oil, as it tries to be less
dependent on fuel imports and sop up palm supply.

But a slump in fuel prices this year has made the programme
less economical and plans to increase the biocontent to 40% have
been delayed due to funding issues.

To raise funds, Indonesia announced higher export levies on
crude palm oil (CPO) exports earlier this month from a flat $55
per tonne of CPO to a progressive levy system of $55-$255
depending on the price.

With the new levy system, BPDP expects to raise between
36-45 trillion rupiah next year to fund the biodidesel programme
and a replanting programme for smallholder farmers, Eddy said.
($1 = 14,090.0000 rupiah)
(Reporting by Bernadette Christina Munthe; Writing by Fathin
Ungku
Editing by Ed Davies)

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