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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) [application](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) to continue on Jan. 1<br> |
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<br>Industry individuals seeking phase-in duration expect gradual introduction<br> |
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<br>Industry deals with technical challenges and cost issues<br> |
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<br>Government funding problems develop due to palm oil cost variation<br> |
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<br>JAKARTA, Dec 18 (Reuters) - Indonesia's strategy to broaden its [biodiesel](https://www.intelligentinvestor.com.au/shares/asx-mbt/mission-newenergy-limited/share-price) mandate from Jan. 1, which has actually fuelled concerns it could curb global palm oil materials, looks increasingly most likely to be carried out gradually, experts stated, as industry participants look for a phase-in duration.<br> |
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<br>Indonesia, the world's most significant producer and exporter of palm oil, plans to raise the compulsory mix of [palm oil](https://stocktwits.com/symbol/MNEL) in [biodiesel](https://www.proactiveinvestors.co.uk/companies/news/159352/mission-newenergy-debt-free-focused-on-biofuel-joint-venture-60797.html) to 40% - called B40 - from 35%, a policy that has actually triggered a jump in palm futures and might pressure costs further in 2025.<br> |
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<br>While the government of President Prabowo Subianto has stated consistently the strategy is on track for full launch in the new year, market watchers state expenses and technical obstacles are likely to result in [partial execution](https://www.crunchbase.com/organization/mission-newenergy) before full adoption across the sprawling archipelago.<br> |
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<br>Indonesia's most significant fuel seller, state-owned Pertamina, said it requires to modify a few of its fuel terminals to mix and keep B40, which will be finished during a "transition duration after federal government establishes the required", spokesperson Fadjar Djoko Santoso informed Reuters, without offering information.<br> |
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<br>During a meeting with government authorities and [biodiesel](https://www.proactiveinvestors.co.uk/companies/news/159346/mission-newenergy-delivers-maiden-biodiesel-production-to-global-oil-major-24476.html) manufacturers last week, fuel retailers asked for a [two-month](https://stocktwits.com/symbol/MNEL) shift period, Ernest Gunawan, secretary general of [biofuel](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) [manufacturers association](https://www.proactiveinvestors.com.au/ASX:MBT/Mission-NewEnergy-Ltd) APROBI, who remained in participation, informed Reuters.<br> |
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<br>Hiswana Migas, the [fuel sellers'](https://www.businessnews.com.au/Company/Mission-NewEnergy) association, did not right away react to an ask for comment.<br> |
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<br>Energy ministry senior main Eniya Listiani Dewi informed Reuters the required walking would not be executed slowly, and that [biodiesel producers](https://www.google.com/search?kgmid=/m/0cqd_rb) are all set to supply the greater blend.<br> |
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<br>"I have verified the readiness with all manufacturers recently," she said.<br> |
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<br>APROBI, whose members make fatty acid [methyl ester](https://www.pinterest.com.au/missionnewenergy/) (FAME) from palm oil to be with diesel fuel, stated the government has actually not provided allotments for producers to offer to sustain merchants, which it usually has actually done by this time of the year.<br> |
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<br>"We can't deliver the goods without purchase order documents, and order files are acquired after we get agreements with fuel companies," Gunawan told Reuters. "Fuel companies can just sign agreements after the ministerial decree (on [biodiesel](https://www.intelligentinvestor.com.au/shares/asx-mbt/mission-newenergy-limited/share-price) allotments)."<br> |
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<br>The government plans to assign 15.62 million kilolitres (4.13 billion gallons) of FAME for B40 in 2025, Eniya told Reuters, less than its [initial estimate](https://www.investing.com/equities/mission-newenergy-ltd-company-profile) of 16 million kilolitres.<br> |
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<br>[FUNDING](https://www.energy-xprt.com/companies/mission-newenergy-limited-36048) CHALLENGES<br> |
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<br>For the federal government, [moneying](https://www.proactiveinvestors.com.au/ASX:MBT/Mission-NewEnergy-Ltd) the higher mix might likewise be a challenge as palm oil now costs around $400 per metric lot more than petroleum. Indonesia utilizes proceeds from palm oil export levies, handled by a firm called BPDPKS, to cover such spaces.<br> |
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<br>In November, BPDPKS estimated it needed a 68% boost in aids to 47 trillion rupiah ($2.93 billion) next year and estimated levy collection at around 21 trillion rupiah, sustaining market speculation that a levy hike impends.<br> |
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<br>However, the [palm oil](https://www.zoominfo.com/c/mission-newenergy/346542889) market would object to a levy walking, said Tauhid Ahmad, a senior expert with think-tank INDEF, as it would hurt the industry, consisting of palm smallholders.<br> |
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<br>"I think there will be a hold-up, since if it is carried out, the subsidy will increase. Where will (the cash) come from?" he said.<br> |
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<br>Nagaraj Meda, [handling director](https://www.marketscreener.com/quote/stock/MISSION-NEWENERGY-LIMITED-178469/company/) of Transgraph Consulting, a commodity consultancy, said B40 execution would be challenging in 2025.<br> |
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<br>"The application may be sluggish and progressive in 2025 and most likely 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 attain energy self-sufficiency and cut $20 billion of annual fuel imports. ($1 = 16,035.0000 rupiah) (Reporting by [Bernadette](https://www.energy-xprt.com/companies/mission-newenergy-limited-36048) Christina |
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