The Jakarta Post
The government will decide whether to resume the 20 percent biodiesel blend (B20) policy for the locomotive sector by the end of June, when it expects to complete a fuel performance test in Sumatra.
The government decided in May 2017 to relax the B20 policy for locomotives operated by state-owned railway company PT KAI following sporadic cases of engine failure the company experienced since the policy was first implemented in 2016.
Since January, the government has been testing the performance of locomotives manufactured by two American companies, General Electric (GE) and Electro-Motive Diesel (EMD), running on 20 percent-blended biodiesel on the Tarahan-Tanjung Enim railway from Lampung to South Sumatra.
“The testing will run for six months until June,” the Energy and Mineral Resources Ministry's bioenergy director, Andriah Feby Misna, said recently.
“While awaiting the result of the [locomotive performance] test, we will restart the biodiesel blend program in the locomotive sector, but at a lower concentration of only 5 percent,” she said.
The government aims to increase the annual consumption of palm oil-based biodiesel this year by 76.47 percent, to 5.7 million kiloliters.
BMI Research, a unit of the Fitch Group, has projected that palm oil prices will average at around 2,500 Malaysian ringgit (US$636.1) per ton in 2018, down 7.5 percent year-on-year.
“[Palm oil] production will continue to grow, keeping palm oil supply ample and prices subdued,” BMI Research stated on Feb. 27. (bbn)