Energy and Mineral Resources Ministry implements 5 percent biodiesel blending policy to subsidized diesel, according to a report uploaded on the official website of Indonesian Association of Palm Oil Producers (GAPKI).
New Renewable Energy and Energy Conservation Director General Rida Mulyana said that the policy was taken based on the instructions from Energy and Mineral Resources Minister Ignatius Jonan.
“The minister suggests to start the 5 percent biodiesel blend program in the locomotive sector while awaiting the result of 20 percent-blended biodiesel performance test,” Mulyana said in a report that was uploaded on the weekend.
According to Mulyana, the decision to require locomotives to run on diesel with a 5 percent-blended biodiesel (B5) will be applied until July this year, while the government runs tests on 20 percent-blended material.
“At the moment, the government is still running a test on B20. B5 will be tested on four locomotives, we’ll see the difference later,” exclaimed Mulyana.
The policy of making B5 obligatory, according to Mulyana, would bring biodiesel consumption for the locomotive sector to an estimated 20,000 kiloliters a year.
The policy requires the 15 percent for mining operations to contain palm oil-based biodiesel, Last year, the palm oil consumed was 2.86 million kiloliters, while this year, it is expected to reach 3.5 million kiloliters.
Blending biodiesel into fuels will not only reduce demands for diesel fuel but also increase consumption of palm oil, strengthen its price and reduce greenhouse gas emissions.
“The increase in CPO will benefit the palm oil farmers and push biodiesel prices up,” he said.