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Indonesia spent more on biodiesel subsidies than funds collected in 2020

January 12/2021

MOSCOW (MRC) -- Indonesia spent more on biodiesel subsidies than funds it collected through export levies last year, reported Reuters with reference to Eddy Abdurrachman, president director of the country's Estate Crop Fund (BPDP).

BPDP, the government body in charge of subsidising Indonesia's palm oil programmes, estimated 17-18 trillion rupiah had been raised from levies this year, while 25.7 trillion rupiah (USD1.82 billion) had been spent subsidising the price difference between crude oil and palm oil, he said.

"In 2020... crude oil price tended to go down, while crude palm oil trend is going up, so that there's this price gap that BPDP should bear," he told a virtual conference.

Indonesia makes it compulsory for its diesel to be blended with 30% biocontent made out of palm oil, as it tries to be less dependent on fuel imports and sop up palm supply.

But a slump in fuel prices this year has made the programme less economical and plans to increase the biocontent to 40% have been delayed due to funding issues.

To raise funds, Indonesia announced higher export levies on crude palm oil (CPO) exports earlier last month from a flat USD55 per tonne of CPO to a progressive levy system of USD55-USD255 depending on the price.

With the new levy system, BPDP expects to raise between 36-45 trillion rupiah next year to fund the biodidesel programme and a replanting programme for smallholder farmers, Eddy said.

As MRC wrote before, Indonesia's largest petrochemical producer Chandra Asri and Netherlands-based storage and terminal operator Vopak are planning to set up an infrastructure joint venture in Indonesia. The two companies signed a letter of intent on 5 October to set up the partnership, which aims to establish a new jetty and tank farm business that will serve third-party customers and to build secondary infrastructure at Chandra Asri's new petrochemical complex, the Indonesian firm said.

Chandra Asri's second petrochemical complex will include a 1.1mn t/yr naphtha-based cracker, 450,000 t/yr high-density polyethylene (HDPE) unit, 300,000 t/yr low-density polyethylene unit (LDPE) and a 450,000 t/yr polypropylene (PP) unit. The producer is aiming to commission the complex in 2024, barring any delays because of the Covid-19 pandemic.

Ethylene and propylene are feedstocks for producing PE and PP.

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
Author:Margaret Volkova
Tags:bioplastics, PP, PE, crude and gaz condensate, homopolymer PP, propylene, LDPE, HDPE, ethylene, petrochemistry, Chandra Asri, Indonesia, Netherlands, Russia.
Category:General News
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