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Group demands non-PSO subsidy to boost local use

A biodiesel business group has urged the government to soon include producers that sell palm oil-based fuel for non-public service obligation (PSO) purposes in the subsidy program to help jack up domestic consumption this year. The government has been fun-neling funds collected from palm oil export taxes to incentivize producers participating in the mandatory 15 percent biodiesel blending (BIS) program in 2015 and the 20 percent biodiesel blending (B20) program in 2016. The funds operator, the Indonesian Oil Palm Estate Fund (BPDP-KS), lowered its biodiesel subsidy by 10.4 percent to Rp 9.6 trillion (US$716.8 million) this year from the previous year. Indonesian Biofuel Producers Association (Aprobi) chairman Paulus Tjakrawan questioned the lack of clear mechanism for non-PSO subsidy. So far, state-owned oil and gas firm Pertamina and chemical distributor PT AKR Corporindo are the sole beneficiaries of the incentive. Both firms, which distribute subsidized fuel, supply biofuel under the PSO and are required to adhere to the mandatory blending policy. The mechanism for non-PSO players has yet to be clear,” Paulus Tjakrawan told The Jakarta Post on Tuesday. There are many non-PSO players in the country. The question is whether they can get similar support from the government” Indonesia, the worlds largest palm oil producer, has promoted widespread use of biodiesel to help reduce its notoriously high greenhouse gas emissions. (THE JAKARTA POST)