JAKARTA — Indonesia, the world’s largest palm oil producer, plans to implement a biodiesel program with 40% bio-content (B40) between 2021 and 2022, a government official said on Tuesday.

From January, Southeast Asia’s largest economy is set to bring in biodiesel with 30% bio-content through the B30 program, which sent palm prices higher on concern that it will export less palm oil — a feedstock for the fuel.

The government aims to start road tests using B40 next year, Luhut Pandjaitan, coordinating minister for Maritime and Investment Affairs, which oversees the energy ministry, told reporters.

President Joko Widodo sees the biodiesel program as a way of offsetting a current account deficit caused by large energy imports, while also supporting demand for palm oil, one of Indonesia’s main commodity exports.

Widodo has asked for further expansion of the biodiesel program and ordered studies on mixing palm-based fuel with jet fuel.

Pandjaitan, however, said the country may not have enough supply of palm oil to go beyond the 50% bio-content.

“We may stop at B50 if (palm) yield is not improved, if the replanting is stalling,” he said.

In 2017, Indonesia launched a palm replanting scheme to double the productivity from small farmers, and had planned to replace old trees on more than 2.4 million hectares (6 million acres) of palm under cultivation by 2025.

However, a government official said in September that the country can only replant 180,000 hectares of plantation area per year, due to difficulties smallholders faced in proving they were eligible for the scheme. This meant it could take at least 12 years to complete the program of replanting palm-growing areas.

Since the launch in 2017, the replanting has only reached around 120,000 hectares. — Reuters

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