Indonesia to raise crude palm oil export levy to fund biodiesel, replanting initiatives

The Indonesian government will raise its export levy on crude palm oil (CPO) from 7.5 per cent to 10 per cent of the reference price, in a move aimed at financing its national biodiesel programme and supporting replanting efforts in the sector. The revised levies, outlined in a regulation issued by the Finance Ministry, also apply to other palm oil derivatives as the country intensifies efforts to maintain long-term sustainability in its palm oil industry. As the world’s largest palm oil producer, Indonesia is using export levies to subsidise its ambitious B40 biodiesel policy, which mandates a 40-per-cent palm oil blend in diesel fuel. The funds help offset the significant price gap between palm oil and conventional crude oil, which makes biodiesel production costlier. However, the policy has raised concerns among industry players about Indonesia’s global competitiveness. Chairman of the Indonesian Palm Oil Association (GAPKI) Eddy Martono warned that the higher export levy ...