JAKARTA: Indonesia, the world’s top palm oil maker, may lower its palm oil biofuel allocation for 2021 as the government adopted a more cautious fuel consumption outlook next year, an official at the National Energy Council said on Wednesday.
The energy ministry may lower the allocation of fatty acid methyl ester (FAME) made from palm oil to 8.5 million kilolitres (kl), from current plan of 9.2 million kl, Djoko Siswanto, secretary general of the council told an industry event.
“We control this so there won’t be too much excess supply of diesel fuel,” Djoko said, adding that Indonesia will not reduce the biofuel blend from its current mandate of 30 per cent, known as B30.
The coronavirus pandemic has resulted in sluggish demand for fuel, including for diesel.
Despite the lower 2021 allocation outlook, Djoko added that the government maintains that between 2020-2025 demand for the biodiesel is estimated to increase by 2.9 per cent per year on average.
The mandatory biodiesel program is top of President Joko Widodo’s agenda to ensure a market for the country’s massive palm oil production while reducing imports of fuel.