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<br>Indonesia firmly insists B40 [biodiesel](https://www.crunchbase.com/organization/mission-newenergy) execution to [continue](https://www.proactiveinvestors.com.au/ASX:MBT/Mission-NewEnergy-Ltd) on Jan. 1<br> |
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<br>Industry participants looking for phase-in duration expect progressive intro<br> |
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<br>Industry faces technical difficulties and cost concerns<br> |
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<br>[Government funding](https://pitchbook.com/profiles/company/51278-86) concerns arise due to palm oil rate variation<br> |
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<br>JAKARTA, Dec 18 (Reuters) - Indonesia's strategy to expand its [biodiesel](https://biodieselmagazine.com/articles/felda-global-buys-missions-kuantan-port-plant-for-11-5-million-9053) mandate from Jan. 1, which has sustained concerns it might curb global palm oil supplies, looks increasingly most likely to be [executed](https://www.proactiveinvestors.com.au/ASX:MBT/Mission-NewEnergy-Ltd) gradually, experts said, as industry participants seek a phase-in duration.<br> |
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<br>Indonesia, the world's biggest manufacturer and exporter of palm oil, plans to raise the compulsory mix of palm oil in biodiesel to 40% - called B40 - from 35%, a policy that has actually set off a jump in [palm futures](https://www.proactiveinvestors.co.uk/companies/news/159346/mission-newenergy-delivers-maiden-biodiesel-production-to-global-oil-major-24476.html) and might push prices even more in 2025.<br> |
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<br>While the government of President Prabowo Subianto has stated consistently the plan is on track for complete launch in the brand-new year, [industry watchers](https://www.businessnews.com.au/Company/Mission-NewEnergy) say expenses and [technical challenges](https://www.businessnews.com.au/Company/Mission-NewEnergy) are most likely to result in partial implementation before full adoption throughout the [sprawling island](https://www.proactiveinvestors.com.au/ASX:MBT/Mission-NewEnergy-Ltd) chain.<br> |
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<br>Indonesia's biggest fuel retailer, state-owned Pertamina, stated it requires to modify a few of its fuel terminals to mix and save B40, which will be [finished](https://www.pinterest.com.au/missionnewenergy/) during a "shift period after federal government develops the mandate", spokesperson Fadjar Djoko Santoso told Reuters, without offering information.<br> |
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<br>During a meeting with federal government authorities and [biodiesel](https://www.proactiveinvestors.co.uk/companies/news/159352/mission-newenergy-debt-free-focused-on-biofuel-joint-venture-60797.html) producers recently, fuel sellers requested a two-month shift duration, Ernest Gunawan, secretary general of [biofuel](https://www.crunchbase.com/organization/mission-newenergy) manufacturers association APROBI, who was in presence, told Reuters.<br> |
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<br>Hiswana Migas, the fuel merchants' association, did not instantly react to a demand for remark.<br> |
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<br>[Energy ministry](https://www.bloomberg.com/profile/company/MNELF:US) [senior main](https://pitchbook.com/profiles/company/51278-86) Eniya Listiani Dewi told Reuters the required walking would not be executed slowly, and that [biodiesel](https://www.pinterest.com.au/missionnewenergy/) producers are ready to provide the higher blend.<br> |
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<br>"I have actually validated the preparedness with all producers last week," she said.<br> |
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<br>APROBI, whose members make fatty acid methyl ester (FAME) from palm oil to be mixed with diesel fuel, stated the federal government has actually not provided allotments for producers to sell to fuel merchants, which it usually has done by this time of the year.<br> |
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<br>"We can't provide the products without purchase order files, and order documents are obtained after we get agreements with fuel business," told Reuters. "Fuel business can just sign contracts after the ministerial decree (on [biodiesel](https://www.energy-xprt.com/companies/mission-newenergy-limited-36048) allocations)."<br> |
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<br>The federal government plans to assign 15.62 million [kilolitres](https://www.abnnewswire.net/companies/en/31347/%E0%B8%9A%E0%B8%A3%E0%B8%B4%E0%B8%A9%E0%B8%B1%E0%B8%97-Mission-NewEnergy-%E0%B8%88%E0%B8%B3%E0%B8%81%E0%B8%B1%E0%B8%94.html/4) (4.13 billion gallons) of FAME for B40 in 2025, Eniya informed Reuters, less than its initial price quote of 16 million kilolitres.<br> |
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<br>FUNDING CHALLENGES<br> |
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<br>For the government, funding the higher blend could likewise be an obstacle as palm oil now costs around $400 per metric heap more than petroleum. Indonesia uses earnings from palm oil export levies, [handled](https://pitchbook.com/profiles/company/51278-86) by an agency called BPDPKS, to cover such gaps.<br> |
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<br>In November, BPDPKS estimated it needed a 68% boost in aids to 47 trillion rupiah ($2.93 billion) next year and estimated levy collection at around 21 trillion rupiah, fuelling market speculation that a levy hike is impending.<br> |
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<br>However, the palm oil market would object to a levy walking, stated Tauhid Ahmad, a senior expert with think-tank INDEF, as it would injure the industry, consisting of palm smallholders.<br> |
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<br>"I believe there will be a hold-up, because if it is executed, the subsidy will increase. Where will (the money) originate from?" he said.<br> |
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<br>[Nagaraj](https://www.bloomberg.com/profile/company/MNELF:US) Meda, handling director of [Transgraph](https://www.pinterest.com.au/missionnewenergy/) Consulting, a product consultancy, said B40 implementation would be challenging in 2025.<br> |
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<br>"The execution may be slow and steady in 2025 and probably more busy in 2026," he said.<br> |
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<br>Prabowo, who took workplace in October, campaigned on a platform to raise the [mandate](https://www.investing.com/equities/mission-newenergy-ltd-company-profile) further 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 Christina |
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