(Bloomberg) -- Indonesia will apply a progressively escalating export levy when the crude palm oil price exceeds $695 a ton, Airlangga Hartarto, the coordinating minister for economic affairs, said in text messages.
The new system will not be effective until the finance minister issues a new regulation, he said.
The export levy needs to be adjusted to support the country’s B30 biodiesel blending program
NOTE: Indonesia, the world’s biggest palm oil producer, collects palm oil export levies through the Oil Palm Plantation Fund Management Agency, which in turn uses the money for biodiesel incentives
Under the new system, for every $25 rise in CPO prices, the levy will be increased by $15
When CPO prices are $670-$695, the levy will be $60/ton, said Musdhalifah Machmud, deputy for food and agriculture at the Coordinating Ministry of Economic Affairs
If CPO prices are below $670, the levy will be $55/ton
The levy increase for processed palm oil will be lower than for CPO: Machmud
NOTE: The government uses a reference price calculated by the trade ministry using international and local prices
Govt set the target volume for biodiesel to be blended with gasoil in 2021 at 9.2m kiloliters, down from this year’s goal of 9.6m kiloliters