JAKARTA: Indonesia, the world’s biggest palm oil producer, will impose export levies to fund biodiesel subsidies as well as replanting, research and development.
Shippers will pay a levy of US$50 a metric ton for palm oil and US$30 for processed products starting this month, Sofyan Djalil, coordinating minister for economic affairs, said in Jakarta on Saturday. The government will keep the threshold for application of a separate export tax at US$750 a ton, Djalil said.
Indonesia has promoted biofuel use to help absorb rising supplies of the world’s most-traded cooking oil and to cut carbon emissions. The country boosted the mandated amount of palm blending in diesel to 10 per cent from 7.5 per cent in 2013, and ordered power plants to mix 20 percent in 2014. The biodiesel subsidy was raised in February to 4,000 rupiah a litre from 1,500 rupiah and the mandated blending for diesel will increase to 15 per cent in April.
“The funds will be used to compensate the price differences between the regular diesel and biodiesel,” Djalil told reporters, referring to proceeds from the levy. “It will also be used to help replanting, research and development and human resources development related to palm oil industry.”