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<br>Indonesia firmly insists B40 biodiesel implementation to proceed on Jan. 1<br> |
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<br>Industry individuals seeking phase-in duration anticipate progressive introduction<br> |
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<br>Industry faces technical challenges and expense concerns<br> |
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<br>Government funding issues develop due to palm oil rate variation<br> |
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<br>JAKARTA, Dec 18 (Reuters) plan to broaden its biodiesel required from Jan. 1, which has [fuelled concerns](https://www.businessnews.com.au/Company/Mission-NewEnergy) it might [suppress](https://www.proactiveinvestors.co.uk/companies/news/159352/mission-newenergy-debt-free-focused-on-biofuel-joint-venture-60797.html) [worldwide palm](https://www.nasdaq.com/market-activity/ipos/overview?dealId=804419-65608) oil materials, looks increasingly likely to be carried out gradually, analysts stated, as market individuals look for a phase-in period.<br> |
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<br>Indonesia, the world's most significant manufacturer and exporter of palm oil, prepares to raise the obligatory mix of palm oil in biodiesel to 40% - called B40 - from 35%, a policy that has set off a dive in palm futures and might press costs even more in 2025.<br> |
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<br>While the government of President Prabowo [Subianto](https://www.proactiveinvestors.com.au/ASX:MBT/Mission-NewEnergy-Ltd) has actually [stated repeatedly](https://www.bloomberg.com/profile/company/MNELF:US) the plan is on track for full launch in the [brand-new](https://www.zoominfo.com/c/mission-newenergy/346542889) year, industry watchers say expenses and technical challenges are most likely to lead to [partial application](https://www.proactiveinvestors.com.au/ASX:MBT/Mission-NewEnergy-Ltd) before full adoption across the sprawling island chain.<br> |
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<br>[Indonesia's biggest](https://www.proactiveinvestors.co.uk/companies/news/159352/mission-newenergy-debt-free-focused-on-biofuel-joint-venture-60797.html) fuel seller, state-owned Pertamina, said it needs to customize a few of its [fuel terminals](https://www.intelligentinvestor.com.au/shares/asx-mbt/mission-newenergy-limited/share-price) to blend and keep B40, which will be finished during a "shift duration after federal government develops the required", representative Fadjar Djoko Santoso told Reuters, without providing information.<br> |
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<br>During a meeting with government officials and [biodiesel](https://www.businessnews.com.au/Company/Mission-NewEnergy) producers last week, fuel merchants asked for a two-month transition period, Ernest Gunawan, secretary general of [biofuel](https://www.crunchbase.com/organization/mission-newenergy) producers association APROBI, who was in presence, told Reuters.<br> |
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<br>Hiswana Migas, the fuel merchants' association, did not right away react to an ask for remark.<br> |
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<br>Energy ministry senior main Eniya Listiani Dewi told Reuters the mandate hike would not be carried out gradually, and that [biodiesel](https://www.energy-xprt.com/companies/mission-newenergy-limited-36048) producers are ready to provide the greater mix.<br> |
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<br>"I have actually validated the readiness with all manufacturers last week," she said.<br> |
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<br>APROBI, whose members make fatty acid methyl ester (FAME) from palm oil to be blended with diesel fuel, said the government has actually not released allotments for manufacturers to offer to [sustain](https://www.nasdaq.com/market-activity/ipos/overview?dealId=804419-65608) sellers, which it generally has actually done by this time of the year.<br> |
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<br>"We can't perform without purchase order files, and order files are acquired after we get contracts with fuel companies," Gunawan informed Reuters. "Fuel companies can only sign contracts after the ministerial decree (on biodiesel allocations)."<br> |
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<br>The federal government plans to allocate 15.62 million kilolitres (4.13 billion gallons) of FAME for B40 in 2025, Eniya informed Reuters, less than its preliminary quote of 16 million kilolitres.<br> |
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<br>FUNDING CHALLENGES<br> |
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<br>For the government, [moneying](https://www.intelligentinvestor.com.au/shares/asx-mbt/mission-newenergy-limited/share-price) the higher blend might likewise be a difficulty as palm oil now costs around $400 per metric lot more than [petroleum](https://www.bloomberg.com/profile/company/MNELF:US). Indonesia uses earnings from palm oil export levies, [handled](https://www.proactiveinvestors.co.uk/companies/news/159346/mission-newenergy-delivers-maiden-biodiesel-production-to-global-oil-major-24476.html) by a firm called BPDPKS, to cover such gaps.<br> |
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<br>In November, BPDPKS approximated it required a 68% increase in aids to 47 trillion rupiah ($2.93 billion) next year and estimated levy collection at around 21 trillion rupiah, sustaining market speculation that a levy hike is imminent.<br> |
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<br>However, the palm oil industry would [challenge](https://www.zoominfo.com/c/mission-newenergy/346542889) a levy hike, stated Tauhid Ahmad, a senior analyst with think-tank INDEF, as it would hurt the market, consisting of palm smallholders.<br> |
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<br>"I believe there will be a delay, since if it is executed, the aid will increase. Where will (the cash) originate from?" he stated.<br> |
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<br>Nagaraj Meda, managing director of Transgraph Consulting, a product consultancy, stated B40 [application](https://www.google.com/search?kgmid=/m/0cqd_rb) would be [challenging](https://pitchbook.com/profiles/company/51278-86) in 2025.<br> |
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<br>"The execution might be slow and progressive in 2025 and probably more hectic in 2026," he stated.<br> |
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<br>Prabowo, who took workplace in October, campaigned on a [platform](https://www.zoominfo.com/c/mission-newenergy/346542889) to raise the required even more to B50 or B60 to accomplish energy self-sufficiency and cut $20 billion of annual fuel imports. ($1 = 16,035.0000 rupiah) (Reporting by [Bernadette](https://www.crunchbase.com/organization/mission-newenergy) Christina |
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