August 27, 2024
JAKARTA – Prabowo Subianto says a European Union embargo on Indonesian palm oil products is “a blessing in disguise”, as it could strengthen the country’s energy self-sufficiency.
The president-elect said he had conveyed that message during his meeting with French President Emmanuel Macron last month.
“During my private meeting with President Macron, he brought up the issue of palm oil. I responded by saying there was no need [for concern]. In fact, we would actually be grateful if European countries chose not to buy our palm oil.”
“My statement seemed to catch him by some surprise,” Prabowo said on Saturday during a speech at the national congress of the National Mandate Party, one of the parties that backed his presidential campaign.
The EU’s Deforestation-free Regulation (EUDR), which entered into force in June of last year and is scheduled to take effect on Dec. 30 this year, imposes severe restrictions on palm oil exports to the block. It is expected to significantly impact Indonesia as the world’s largest producer of crude palm oil (CPO).
Prabowo explained that instead of being sold to European countries, palm oil products could be redirected to the domestic market as raw material for biodiesel.
The government has gradually increased the mandatory percentage of palm oil-based biodiesel in its supply, with the share rising to 35 percent in February last year from the 30-percent mandate in place since 2020. The new mandate, widely known as B35, was implemented nationwide in this month.
Read also: Agriculture minister launches B50 biodiesel in South Kalimantan
Prabowo stated that the program would be upgraded to B40 by early next year. If implemented, it could save the country US$20 billion in diesel imports, he claimed, adding that those budget funds could then be used to support local industry instead.
“The day [after meeting President Macron], I met with French business chambers. I acknowledged that EU countries had placed an embargo on our CPO due to deforestation issues. Thank you very much [for that], as we will now use our CPO for the benefit of our own people,” Prabowo recalled.
Prabowo also emphasized his ambition for Indonesia to become a food exporter within five years. Combined with self-sufficiency in energy through the use of biodiesel, it would make the country an independent nation amid the high tensions between advanced economies.
“If we are secure in food and energy, we do not need to fear anyone in the world. We do not need to be concerned about the value of the rupiah [against the dollar],” he stated.
Read also: Indonesia begins B40 biodiesel trial to power trains
Previously, the Energy and Mineral Resources Ministry confirmed that the B40 program would begin next year. The government is in the process of preparing the necessary supporting infrastructure, such as ports, shipping and logistics.
“Bioenergy will be our priority […] We are preparing to mandate B40, which I hope to issue [as a regulation] on Jan. 1,” said Eniya Listiani Dewi, the ministry’s renewables director general, on Aug. 20, as quoted by CNN Indonesia.
Following last year’s successful trial of B40 in four-wheeled vehicles, the series of trials planned for this year aims to assess its use in agricultural machinery and trains. In July, the ministry enlisted state-owned railway operator PT Kereta Api Indonesia (KAI) to begin a trial using the fuel to power passenger trains.