InfoSAWIT, JAKARTA – The Indonesian government plans to raise the export levy on crude palm oil (CPO) to 10% from the previous 7.5%, based on the reference price set by the Ministry of Trade. This move is aimed at supporting the implementation of the B40 biodiesel program, which is set to take effect on January 1, 2025.
Coordinating Minister for Economic Affairs Airlangga Hartarto explained that the increase in the levy will serve as the main funding source for biodiesel incentives, managed by the Palm Oil Plantation Fund Management Agency (BPDPKS).
“The funding will come from BPDPKS funds. We will raise the levy to 10% and prioritize its use for public service obligations (PSO),” Airlangga stated, as quoted by InfoSAWIT from bloombergtechnoz on Saturday (December 21, 2024).
The increase in the export levy will take effect after the Minister of Finance Regulation (PMK) governing this change is issued. However, Airlangga has not provided details regarding the new rates for other palm oil processed products.
Currently, the export levy for CPO is regulated under PMK Number 62 of 2024, with a rate of 7.5% based on the reference price from the Ministry of Trade. For other processed palm oil products, the levy rates range from 3% to 6%.
This government action also responds to findings from the Audit Board of Indonesia (BPK) regarding the sustainability risks of biodiesel incentive financing. In the Summary of Semester Examination Results (IHPS) I-2024, BPK noted that the management of BPDPKS funds has not fully considered sustainability aspects.
BPK reported that biodiesel incentive spending accounted for 90% of total BPDPKS fund usage, exceeding the established budget policy. This situation poses risks to the sustainability of the biodiesel program, especially if funding sources are inadequate.
“The provision and utilization of biodiesel programs are at risk of funding difficulties, which could disrupt BPDPKS's objectives,” the BPK report stated.
The implementation of B40 biodiesel is considered one of the government's strategic steps to reduce dependence on fossil fuels while increasing domestic CPO absorption. This program is expected to have a positive impact on the palm oil industry and strengthen economic sustainability in the renewable energy sector.
However, the challenges of sustainability in funding and incentive management remain significant tasks for the government and BPDPKS to ensure that this program not only operates effectively but also provides long-term benefits for all stakeholders. (T2)