Indonesia will start road safety tests for its planned B50 biofuel program early next month, according to a Bloomberg report. However, there are concerns over tighter palm oil supplies. “The world’s biggest producer of palm oil is planning to expand its biodiesel mandate from 40% to 50% by the second half of next year to slash a hefty fuel import bill and greenhouse gas emissions. The palm industry is closely watching Indonesia’s timing of the rollout, as the program is expected to soak up supplies available for export and lead to a global palm oil squeeze and higher prices,” said Bloomberg. The Indonesian government is considering partial B50 implementation, only for the public sector, due to potential supply issues. The ideal blend for non-public sector use will be studied in the meantime. To ensure steady supplies, Indonesia would need to expand its palm plantations, said Baginda Siagian, a palm oil official at the agriculture ministry. The country currently has a moratorium in place for opening up forests for new plantations — a move that was essential to slowing rampant deforestation and welcomed by environmentalists. “Agriculture ministry plans for expanding new palm oil plantations by 600,000 hectares, including 400,000 hectares for smallholders and the rest for state-owned companies, to fulfill rising domestic demand,” he said on the sidelines of the conference, without elaborating further, said Bloomberg.
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