B30 Biodiesel in 2021 Potentially Saves USD4.54 Billion Foreign Exchange

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 477.Pers/04/SJI/2021

Date: 24 December 2021

B30 Biodiesel in 2021 Potentially Saves USD4.54 Billion Foreign Exchange

The implementation of the mandatory 30% biodiesel blending (B30) throughout 2021 has the potential to save Indonesia's foreign exchange by up to USD4.54 billion or Rp64.92 trillion (assuming an exchange rate of Rp14,300 per US dollar), Director of Downstream Oil and Gas Business Fostering of the Ministry of Energy and Mineral Resources (EMR), Soerjaningsih, has said at the 'Evaluation of the B30 Implementation in 2021 and Kick-Off of the B30 Implementation in 2022 by BU BBM' held in Bogor on Wednesday (24/12).

Soerjaningsih explained that the compliance level of Fuel Business Entities (BU BBM) in distributing biodiesel is getting better, at 94.17% against the total distributed Solar diesel. Meanwhile, biodiesel utilization hits 97.89% of the total allocation of 9.21 million KL.

"I would like to thank BU BBM for their cooperation that has made the program implementation successful. If there are matters that have not gone as expected, let's evaluate them so that we can make improvements," said Soerjaningsih.

Soerja hopes that the distribution of non-relaxation B0 Solar can be minimized in 2022 so as to reduce the potential for administrative sanctions against BU BBM. Soerja also hopes that the implementation of B30 in the coming years will run smoothly and the utilization and distribution percentage of B30 will continue to rise.

For 2022, 18 BU BBM will be allocated 10,151 million kiloliters of Biodiesel. "We hope that the 18 BU BBM have secured a contract with Biofuel Business Entities (BU BBN), so they can maximize the allocated biofuel according to the specified volume," said Soerjaningsih.

Meanwhile, Director of Bioenergy of the Ministry of EMR, Andriah Feby Misna, appreciated the efforts of the Directorate General of Oil and Gas to start the biofuel procurement process early. This way, the process of determining biofuel allocation in the coming years will be better, while BU BBM and BU BBN have sufficient time to prepare contracts and distribution processes so as to prevent B0.

Director of Fund Disbursement of the Indonesian Oil-Palm Plantation Fund Management Agency (BPDPKS), Edi Wibowo, said the funds paid to the B30 program in 2021 reached Rp51.86 trillion, an increase compared to payment in 2020 of Rp28 trillion. This amount includes a carry-over from 2020 and payments until November 2021.

"We hit a record payment of biodiesel at 9.7 million KL and Rp51.86 trillion, which is a carry-over from 2020 and payments until November 2021," said Edi.

Based on the BPDPKS data, from 2015 to 2021, the agency has paid Rp110 trillion for 29.14 million KL of biodiesel. Meanwhile, the total volume of distributed biodiesel is 33.07 million KL.

For the record, the mandatory B30 program is the government's effort to increase the use of new, renewable energy and reduce the trade balance deficit. Regulation of Minister of EMR Number 32 of 2008 as amended by Regulation of Minister of EMR Number 12 of 2012 sets out the stages of biodiesel blending into Solar diesel which must be carried out by BBM BU.

To support the implementation of Biodiesel blending into Solar diesel, Regulation of Minister of EMR Number 41 of 2018 on the Procurement and Utilization of Biodiesel in the Framework of Financing by the Oil-Palm Plantation Fund Management Agency stipulates that financing incentives by the BPDPKS which were originally intended only for Certain Types of Diesel Oil have been extended to all types of Solar diesel that are blended with biodiesel. (IY)

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