Biofuel Development

Supports the use of palm oil-based biodiesel as a renewable energy source by stabilizing the market, reducing dependence on fossil fuels, and enhancing the sustainability of the palm oil industry. Through this program, BPDP plays a role in driving the green energy transition and strengthening the competitiveness of Indonesia's palm oil industry in the global market

Array

Legal Basis

This program is based on several key regulations, including:

  • Presidential Regulation No. 61 of 2015 – Mandates that BPDPKS funds are used to support the supply and utilization of palm oil-based biofuels, particularly biodiesel.
  • Ministry of Finance Regulation No. 113/PMK.01/2015 – Governs the mechanism for utilizing BPDPKS funds to support the palm oil-based biofuel industry.
  • Ministry of Energy and Mineral Resources (ESDM) Regulation No. 12 of 2015 – Regulates the mandatory blending of biodiesel into fuel oil used in Indonesia.
  • Decree of the Director General of New Renewable Energy and Energy Conservation No. 189K/10/DJE/2022 – Establishes the allocation and market index price of biodiesel supported by BPDPKS.

Program Objectives

This program is designed to:

  • Ensure Biodiesel Market Stability – Support the biodiesel industry to remain competitive and maintain market certainty in the domestic sector.
  • Reduce Dependence on Fossil Fuels – Promote the use of renewable energy to reduce fuel oil imports.
  • Support Palm Oil Industry Sustainability – Create added value for the palm oil industry by expanding the market for its derivative products, such as biodiesel.

Program Scope

The Biofuel Development Program covers several key areas:

Biodiesel Price Difference Subsidy

BPDP funds are used to cover the difference between the market index price of biodiesel and the market index price of diesel fuel.

Biofuel Infrastructure Support

  • Development and expansion of biodiesel production facilities.
  • Improvement of biofuel distribution and logistics chains for greater efficiency.

Biofuel Technology Research and Innovation

  • Development of more efficient and environmentally friendly biodiesel production technologies.
  • Studies on the use of biofuels in other sectors, such as aviation (bio-aviation fuel) and maritime industries.

Product Certification and Standardization

  • Establishing biodiesel quality standards in compliance with national and international regulations.
  • Enhancing transparency and accountability in biofuel distribution.

Funding Mechanism

The disbursement of funds for the Biofuel Development Program by BPDP follows these stages:

  1. Proposal Submission or Registration
    • Biodiesel-producing companies seeking support must submit proposals or register with BPDP through an online application, attaching legal entity and land ownership documentation.
  2. Evaluation and Verification
    • BPDP, together with the Ministry of Energy and Mineral Resources (ESDM) and relevant institutions, evaluates and verifies the eligibility of proposals based on criteria such as production capacity, product quality, and regulatory compliance.
  3. Fund Recipient Determination
    • After passing the evaluation, BPDP designates the recipients of the funds and drafts cooperation agreements related to biodiesel blending and distribution.
  4. Subsidy Fund Disbursement
    • The subsidy funds are disbursed to companies after verification by the Ministry of Energy and Mineral Resources (ESDM), ensuring that biodiesel has been distributed in accordance with blending policies.
  5. Monitoring and Evaluation
    • BPDP conducts oversight and evaluation to ensure that funds are used appropriately and that activities proceed as planned.

RELATED POSTS

N/A