The Association of Indonesian Palm Oil Grower (APKASINDO) welcomes the mandatory use of the B30, a biodiesel containing 30 percent of palm oil, and the government’s plan to continue raising the ratio of the mixture, saying that it would significantly raise domestic demand for crude palm oil (CPO) and thus benefit the millions of oil palm growers in the country.
“The implementation of the B30 and further B types will create a really big domestic demand for CPO and thus carry a multiplier effect on the 16.5 growers in palm oil plantations,” APKASINDO Chairman Gulat Manurung Told the Palm Scribe in a written statement on Monday (13/1).
Gulat said that the impact of the B30 program which took effect this year is felt by both small scale and medium scale growers as well as workers in palm oil refineries. The government is planning to continue to test biodiesel with higher palm oil content saying that tests for B40 and B50 are scheduled to start early this year.
He said that the B30 program has already increased the price of fresh fruit bunch (FFBs) at the grower’s level and has even able to save the state forest exchange reaching Rp 110 trillion in diesel oil imports.
“The mandatory B30, B40, B50 and so forth, pose hopes, opportunities as well as challenges for the palm oil plantation industry,” Gulat said.
They represented an opportunity to support the country’s food resilience as well as energy self-reliance and these should really be given attention. “There is no such thing as too late,” he said.
Indonesia, he said, had been lulled for too long with its imports of diesel oil and also by the pride of being the world’s largest CPO exporters, but did not realize how dependent it had become on price fluctuations in the international market as well as the whims of buyer countries.
“So far, we have only been a trade toy for them, it is now time for the remote control to be in the hands of Indonesia,” he said.
Gulat, however, also cautioned that the government needed to be careful and safeguard the availability of the raw materials, so that biodiesel plants would not face shortages.
He cited the need to accelerate the replanting program for oil palm smallholders, making sure that the biodiesel producers could continue to supply fatty acid methyl esters (FAME) for the biodiesel mixture, support the building of refineries for palm oil and its derivative products, assure legal certainty and improve the trade in FFBs. The problem of palm oil plantations in forest areas also needed to be settled.
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