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<br>Indonesia insists B40 [biodiesel](https://www.proactiveinvestors.co.uk/companies/news/159352/mission-newenergy-debt-free-focused-on-biofuel-joint-venture-60797.html) execution to [continue](https://www.intelligentinvestor.com.au/shares/asx-mbt/mission-newenergy-limited/share-price) on Jan. 1<br> |
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<br>Industry individuals seeking phase-in duration [anticipate progressive](https://stocktwits.com/symbol/MNEL) introduction<br> |
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<br>Industry deals with technical obstacles and expense issues<br> |
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<br>Government financing issues develop due to palm oil rate variation<br> |
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<br>JAKARTA, Dec 18 (Reuters) - Indonesia's strategy to expand its [biodiesel](https://www.marketscreener.com/quote/stock/MISSION-NEWENERGY-LIMITED-178469/company/) mandate from Jan. 1, which has actually sustained issues it could curb worldwide palm oil products, looks [progressively](https://www.google.com/search?kgmid=/m/0cqd_rb) likely to be executed gradually, experts stated, as market participants seek a phase-in duration.<br> |
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<br>Indonesia, the world's most significant manufacturer and exporter of palm oil, plans to raise the compulsory mix of palm oil in [biodiesel](https://www.proactiveinvestors.co.uk/companies/news/159346/mission-newenergy-delivers-maiden-biodiesel-production-to-global-oil-major-24476.html) to 40% - called B40 - from 35%, a policy that has set off a dive in palm futures and may push rates further in 2025.<br> |
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<br>While the government of President Prabowo Subianto has actually stated repeatedly the strategy is on track for full launch in the [brand-new](https://www.crunchbase.com/organization/mission-newenergy) year, [market watchers](https://www.zoominfo.com/c/mission-newenergy/346542889) say expenses and technical challenges are likely to result in partial application before complete adoption across the sprawling archipelago.<br> |
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<br>Indonesia's biggest fuel merchant, state-owned Pertamina, said it needs to customize some of its fuel terminals to mix and keep B40, which will be finished throughout a "transition period after government establishes the mandate", representative Fadjar Djoko Santoso informed Reuters, without supplying details.<br> |
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<br>During a conference with government officials and biodiesel producers last week, fuel retailers asked for a two-month transition duration, Ernest Gunawan, secretary general of [biofuel](https://www.zonebourse.com/cours/action/MISSION-NEWENERGY-LIMITED-8557641/) manufacturers association APROBI, who was in participation, told [Reuters](https://pitchbook.com/profiles/company/51278-86).<br> |
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<br>Hiswana Migas, the fuel merchants' association, did not right away respond to an ask for remark.<br> |
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<br>Energy ministry senior official Eniya Listiani Dewi informed Reuters the [mandate hike](https://www.proactiveinvestors.co.uk/companies/news/159352/mission-newenergy-debt-free-focused-on-biofuel-joint-venture-60797.html) would not be carried out slowly, and that biodiesel producers are prepared to supply the greater mix.<br> |
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<br>"I have actually verified the preparedness with all producers recently," she said.<br> |
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<br>APROBI, whose members make fat methyl ester (FAME) from palm oil to be combined with diesel fuel, stated the federal government has actually not [released allowances](https://www.businessnews.com.au/Company/Mission-NewEnergy) for [manufacturers](https://www.zoominfo.com/c/mission-newenergy/346542889) to offer to fuel merchants, which it normally has actually done by this time of the year.<br> |
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<br>"We can't perform without order files, and order files are obtained after we get agreements with fuel business," Gunawan informed Reuters. "Fuel business can only sign agreements after the ministerial decree (on biodiesel allotments)."<br> |
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<br>The federal government plans to designate 15.62 million kilolitres (4.13 billion gallons) of FAME for B40 in 2025, Eniya informed Reuters, less than its [initial](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) 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 mix could also be a challenge as palm oil now costs around $400 per metric lot more than petroleum. Indonesia utilizes [earnings](https://www.google.com/search?kgmid=/m/0cqd_rb) from palm oil export levies, managed by an agency called BPDPKS, to cover such gaps.<br> |
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<br>In November, BPDPKS approximated it needed a 68% [increase](https://www.nasdaq.com/market-activity/ipos/overview?dealId=804419-65608) in aids to 47 trillion rupiah ($2.93 billion) next year and approximated levy collection at around 21 trillion rupiah, [sustaining market](https://forest500.org/rankings/companies/mission-newenergy-limited) speculation that a [levy walking](https://www.crunchbase.com/organization/mission-newenergy) is imminent.<br> |
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<br>However, the palm oil industry would challenge a levy walking, said Tauhid Ahmad, a senior expert with think-tank INDEF, as it would injure the industry, consisting of [palm smallholders](https://www.proactiveinvestors.co.uk/companies/news/159346/mission-newenergy-delivers-maiden-biodiesel-production-to-global-oil-major-24476.html).<br> |
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<br>"I believe there will be a hold-up, since if it is executed, the aid will increase. Where will (the cash) come from?" he said.<br> |
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<br>Nagaraj Meda, handling director of [Transgraph](https://stocktwits.com/symbol/MNEL) Consulting, a commodity consultancy, stated B40 implementation would be challenging in 2025.<br> |
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<br>"The application may be sluggish and steady in 2025 and probably more fast-paced in 2026," he stated.<br> |
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<br>Prabowo, who took workplace in October, campaigned on a platform to raise the mandate further to B50 or B60 to accomplish energy self-sufficiency and cut $20 billion of [annual fuel](https://www.energy-xprt.com/companies/mission-newenergy-limited-36048) imports. ($1 = 16,035.0000 rupiah) ( by Bernadette Christina |
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