From b8afbc8754d2a63b831fccc80d04d4d974935c92 Mon Sep 17 00:00:00 2001 From: leliabrumfield Date: Sun, 12 Jan 2025 03:53:24 +0800 Subject: [PATCH] Add 'Indonesia's Higher Biodiesel Mandate Rollout May Be Gradual,' --- ...iesel-Mandate-Rollout-May-Be-Gradual%2C.md | 23 +++++++++++++++++++ 1 file changed, 23 insertions(+) create mode 100644 Indonesia%27s-Higher-Biodiesel-Mandate-Rollout-May-Be-Gradual%2C.md diff --git a/Indonesia%27s-Higher-Biodiesel-Mandate-Rollout-May-Be-Gradual%2C.md b/Indonesia%27s-Higher-Biodiesel-Mandate-Rollout-May-Be-Gradual%2C.md new file mode 100644 index 0000000..0992ed7 --- /dev/null +++ b/Indonesia%27s-Higher-Biodiesel-Mandate-Rollout-May-Be-Gradual%2C.md @@ -0,0 +1,23 @@ +
Indonesia insists B40 [biodiesel](https://www.marketscreener.com/quote/stock/MISSION-NEWENERGY-LIMITED-178469/company/) [execution](https://www.pinterest.com.au/missionnewenergy/) to continue on Jan. 1
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Industry participants seeking phase-in duration expect steady intro
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Industry deals with technical difficulties and cost issues
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Government funding concerns emerge due to palm oil cost disparity
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JAKARTA, Dec 18 (Reuters) [- Indonesia's](https://www.intelligentinvestor.com.au/shares/asx-mbt/mission-newenergy-limited/share-price) strategy to broaden its [biodiesel](https://biodieselmagazine.com/articles/felda-global-buys-missions-kuantan-port-plant-for-11-5-million-9053) required from Jan. 1, which has [sustained issues](https://pitchbook.com/profiles/company/51278-86) it might curb global palm oil materials, looks progressively likely to be carried out gradually, analysts stated, as industry participants seek a phase-in duration.
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Indonesia, the world's most significant producer and [exporter](https://www.zonebourse.com/cours/action/MISSION-NEWENERGY-LIMITED-8557641/) of palm oil, plans to raise the necessary mix of palm oil in biodiesel to 40% - called B40 - from 35%, a policy that has actually set off a dive in palm futures and might [pressure](https://pitchbook.com/profiles/company/51278-86) costs even more in 2025.
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While the government of President Prabowo Subianto has said consistently the [strategy](https://www.nasdaq.com/market-activity/ipos/overview?dealId=804419-65608) is on track for full launch in the brand-new year, industry watchers say costs and technical difficulties are most likely to result in partial implementation before complete adoption throughout the sprawling archipelago.
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Indonesia's most significant fuel seller, [state-owned](https://forest500.org/rankings/companies/mission-newenergy-limited) Pertamina, said it requires to modify a few of its fuel terminals to mix and store B40, which will be finished during a "transition period after government develops the mandate", [spokesperson Fadjar](https://www.bloomberg.com/profile/company/MNELF:US) Djoko Santoso told Reuters, without offering details.
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During a meeting with [government officials](https://www.proactiveinvestors.com.au/ASX:MBT/Mission-NewEnergy-Ltd) and biodiesel producers last week, [fuel retailers](https://www.google.com/search?kgmid=/m/0cqd_rb) requested a duration, Ernest Gunawan, secretary general of [biofuel](https://stocktwits.com/symbol/MNEL) manufacturers association APROBI, who remained in presence, told Reuters.
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Hiswana Migas, the fuel sellers' association, did not right away react to a request for remark.
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[Energy ministry](https://www.google.com/search?kgmid=/m/0cqd_rb) senior official Eniya Listiani Dewi [informed Reuters](https://www.proactiveinvestors.com.au/ASX:MBT/Mission-NewEnergy-Ltd) the required hike would not be executed gradually, which biodiesel manufacturers are ready to supply the higher blend.
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"I have verified the readiness with all producers last week," she said.
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APROBI, whose members make fat methyl ester (FAME) from palm oil to be blended with diesel fuel, said the [federal government](https://www.google.com/search?kgmid=/m/0cqd_rb) has actually not provided [allowances](https://www.pinterest.com.au/missionnewenergy/) for [manufacturers](https://www.google.com/search?kgmid=/m/0cqd_rb) to sell to fuel retailers, which it normally has actually done by this time of the year.
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"We can't deliver the products without purchase order documents, and purchase order files are obtained after we get agreements with fuel business," Gunawan informed Reuters. "Fuel companies can only sign contracts after the ministerial decree (on [biodiesel](https://www.pinterest.com.au/missionnewenergy/) allotments)."
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The government plans to assign 15.62 million kilolitres (4.13 billion gallons) of FAME for B40 in 2025, Eniya informed Reuters, less than its initial price quote of 16 million kilolitres.
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FUNDING CHALLENGES
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For the government, moneying the higher blend could also be an obstacle as palm oil now costs around $400 per metric heap more than crude oil. Indonesia uses profits from palm oil export levies, managed by a company called BPDPKS, to cover such spaces.
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In November, BPDPKS estimated it required a 68% increase in aids to 47 trillion rupiah ($2.93 billion) next year and approximated levy collection at around 21 trillion rupiah, [sustaining market](https://www.intelligentinvestor.com.au/shares/asx-mbt/mission-newenergy-limited/share-price) speculation that a levy hike impends.
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However, the palm oil industry would object to a levy walking, stated Tauhid Ahmad, a senior expert with think-tank INDEF, as it would injure the industry, consisting of palm smallholders.
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"I think there will be a hold-up, since if it is executed, the subsidy will increase. Where will (the cash) originate from?" he said.
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Nagaraj Meda, handling director of Transgraph Consulting, a product consultancy, stated B40 implementation would be [challenging](https://www.nasdaq.com/market-activity/ipos/overview?dealId=804419-65608) in 2025.
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"The application may be slow and progressive in 2025 and most likely more hectic in 2026," he stated.
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Prabowo, who took office in October, campaigned on a platform to raise the mandate even more to B50 or B60 to attain energy self-sufficiency and cut $20 billion of yearly fuel imports. ($1 = 16,035.0000 rupiah) (Reporting by Bernadette Christina \ No newline at end of file