T

he government is optimistic that B20 biodiesel fuel will be ready to enter the market next year in accordance with an initial schedule, as no technical or quality problems were found in the new variant of the diesel fuel during a recent test.

Indonesia Oil Palm Estate Fund (BPDP) fund distribution director Dadan Kusdiana said in Medan over the weekend that the use of B20 diesel had been through a series of trials, including a 3,383 kilometer vehicle road test from Jakarta to Medan.

The test results showed no problems in the utilization of the biodiesel variant despite the fact that the vehicles'€™ fuel consumption had increased while engine power decreased compared to those using regular diesel, he said.

B20 is diesel fuel that contains 20 percent palm oil (fatty acid methyl ester)-based biodiesel and 80 percent petroleum diesel. The new diesel variant has been developed to support the government'€™s requirement to increase the content of biodiesel in diesel fuel for transportation to 20 percent beginning next year from 15 percent at present.

'€œThe B20 biodiesel is environmentally friendly,'€ he said, adding that the fuel was able to contribute to the country'€™s economy as it added value to Crude Palm Oil (CPO) and reduced diesel imports, thus saving foreign exchange reserves,

Dadan said that the government, through his agency, still subsidized the sale of B20 biodiesel with an average Rp 2,500 (US$0.18) per liter from the BPDP'€™s treasury.

The special agency, set up as a public service agency (BLU) under the Finance Ministry, has been collecting levies on exports of palm oil, also called CPO fund, since July 16 to develop the palm-oil industry and pay for biodiesel subsidies in Indonesia.

The levies amount to US$30 per metric ton for processed palm oil and $50 per metric ton for CPO, according to the Finance Ministry rule.

Dadan said that as of today, the BPDP had collected around Rp 4 trillion of funds from CPO exporters.

'€œOf the amount, we have disbursed around Rp 300 billion to subsidize B15 biodiesel production,'€ he said, adding that the funds were also used by the government for research.

The Energy and Mineral Resources Ministry'€™s bioenergy subdirectorate head, Dothor Panjaitan, said that biodiesel could significantly replace the use of regular diesel, whose consumption had reached 426,736 kiloliters as of August.

North Sumatra University (USU) acting rector Subhilhar said that his institution would use B20 for all of its vehicles, including campus buses.