Indonesia postponed the mandatory use of biodiesel B40 as a fuel for land transportation to February. Deputy Minister of Energy and Mineral Resources, Yuliot Tanjung, made this announcement on Jan 3. This policy was initially scheduled to be implemented from January.

B40 consists of 60% diesel oil and 40% biofuel made from palm oil. B35 is currently widely used in the country. The implementation of B40 was delayed, probably because the production system was not yet fully established. Market participants pointed out that there were technical issues in production and a shortage of feedstock palm oil.

In fact, the government recently introduced some policies to prioritize the supply of palm oil for the domestic market. The government raised the export tax for crude palm oil (CPO) from 7.5% to 10% in December last year. In addition, it was heard this month that export permit applications for used cooking oil and palm oil residues have been suspended.