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Incentives for biodiesel

Last updated: 4 April 2022

The Indonesian Government subsidises domestic biodiesel consumption to support its biodiesel blending mandates (B15, B20, and B30 mandatory program). 

Funds are collected from levies on palm oil exports and managed by the Oil Palm Plantation Fund Management Agency. A portion of the collected funds are used to offset the difference in price between biodiesel and fossil diesel. The calculation to determine the levy has changed significantly over the years between flat rate and progressive rates linked to the price of palm oil. The total amount distributed depends on the difference in price between biodiesel and fossil fuels as well as the target blend rate for biodiesel. 

Biodiesel incentives disbursed to biofuel companies to cover the price differential between diesel fuel and biofuels are managed by the Oil Palm Plantation Fund Management Agency (BPDPKS). 

BPDPKS provided IDR 28.01 trillion in incentives for the production of 8.42 billion litres of biodiesel in 2020; in 2021, it is expecting to provide DR 45 trillion for the production of 9.2 billion litres.

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