Indonesia Cuts Cost Estimate for Turning Palm Oil Into Biodiesel

(Bloomberg) -- Indonesia, the world’s largest palm-oil producer, has cut the cost assumption of converting crude palm oil into biodiesel by 20% to $80 per metric ton, according to the Energy and Mineral Resources Ministry.

The revision, effective this month, is needed to ensure the mandatory program to blend 30% of palm-biofuel with 70% gasoil, known as B30, continues even as the price gap between biodiesel and gasoil rises because of the pandemic, the ministry said in a statement on its website.

The ministry reduced the biodiesel market price index in June to 6,941 rupiah/liter from May’s revised 8,352 rupiah/liter. A lower index will reduce the price gap for the B30 program.

©2020 Bloomberg L.P.

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