JAKARTA, June 16 (Reuters) - Indonesia, the world’s largest producer of palm oil, is pushing back by three years its target to produce fuel made entirely from palm oil, a government document showed on Tuesday.
The government initially aimed to start producing the so-called “green diesel” in 2023, but is moving the target to 2026, according to a document presented by chief economic minister Airlangga Hartarto at a media briefing.
Indonesia revised the target after research and investment plans were disrupted by the coronavirus outbreak which has infected over 40,000 people in the country, said Musdhalifah Machmud, deputy minister at the country’s Coordinating Ministry of Economic Affairs.
Indonesia is constructing refineries to process palm oil directly to fuel. It currently uses biodiesel, known as B30, which is produced by mixing palm oil’s fatty acid methyl ester (FAME) with fossil diesel fuel.
“One of the reason for the delay is COVID-19, but generally the investment and research needed to be properly initiated and that needs time” Machmud told Reuters separately in a text message.
“Green diesel” is part of Indonesia’s plan to maximise use of palm oil at home to absorb excess supply and slash expensive fuel imports.
Indonesia had set a target to raise the content of FAME in the mandatory biodiesel to 40% in 2021 from the already ambitious content of 30%, but delayed that by a year due to low crude oil prices. (Reporting by Tabita Diela and Bernadette Christina Munthe; Writing by Fransiska Nangoy; Editing by Martin Petty)