JOURNAL MONITOR EDITION 30 : THE MANDATORY POLICY OF BIODIESEL AS “THE ANCHOR” OF INDONESIAN ECONOMY
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The policy of mandatory B30 was implemented in early 2020, and it is estimated that the biodiesel needs for the policy will reach 9.6 million kiloliters. But in this year, the world also faced Covid-19 pandemic. This pandemic had an impact on reducing the absorption of domestic biodiesel, due to a decrease in transportation activities because of policies to restrict social and economic activities. Even though it has decreased, the total biodiesel production in the B30 has accumulated to reach 5.73 million kiloliters or about 60 percent of the target.
On the other hand, the pandemic also give an impact on a decrease in the fossil fuel’s price and increase CPO’s price.. With this price trends, the B30 mandatory policy is considered by certain parties to be less efficient because the difference between the price of the fossil diesel price and the Market Index Price of biodiesel is too large and it closes the opportunity for producers to enjoy greater profits from exporting palm oil, so this policy is considered to be losses in business (financial).
Even though, the biodiesel (B30) mandatory policy is designed as an instrument of economic policy that aims to produce greater economic and social benefits with a larger scale/coverage of the population that enjoys these benefits in the long term, not a financial policy that profitable only for industry actor. This facts can be seen based on data published by Secretariat General National Energy Council (2019) that achievement of B20 policy on several economic indicators such as saving foreign exchange, increasing added value and labor absorption, and environmental impact of reducing carbon emissions.
Implementing the policy of mandatory B30 will generate greater economic benefits and emission reductions. Even in its realization, which has only been implemented for a few months, this policy has been able to reduce the amount of Indonesia’s oil and gas balance deficit net trade and save total trade balance during a pandemic and the threat of a global economic recession. The benefits of B30 can also be seen from a broader (macro) point of view, there is in addition to saving foreign exchange, reducing emissions and creating a large multiplier effect for the economy, this policy can create ), stabilizing CPO prices and FFB prices, opportunities to become price-makers at the global market level, solutions to trade barriers and policies that discriminate against palm oil, the achievement of the SDGs, and in order to achieve national energy security and independence.