Palm Oil Internet Seminar

Section 2: Global Palm Oil Market Focus:
Indonesia's Biodiesel Policies Impacting Both Domestic and Export Markets
By: Mr. Togar Sitanggang

Mr Togar Sitanggang is the Vice Chairman of Indonesian Palm Oil Association/ GAPKI Since April 2018, Previously He served as Secretary General from April 2015 to April 2018. Currently, Mr Sitanggang works for PT Musim Mas as General Manager base in Jakarta. He has been in palm oil industries for almost 30 years with national and multinational companies including PT SMART Tbk, Cargill, Bunge, ED & F Man, Darmex in many positions ranging from research, logistics, trading and now corporate affairs. Mr Sitanggang is also active in palm oil related associations in Indonesia such as APROBI (Association of Biofuels Producers Indonesia), APOLIN (Association of Oleochemicals Manufacturer) and DMSI (Dewan Minyak Sawit Indonesia – Indonesia Palm Oil Board). Mr. Togar Sitanggang, was born in North Sumatera in 1966, graduated from University of Southern California, Los Angeles, USA, in Computer Science degree and obtained his Master Degree from North Sumatra University in Medan.
Indonesia’s Biodiesel program has been considered as one of the main drivers of Palm Oil market in last 3 years. After the establishment of CPO Fund in 2015, the mandatory blending program in Indonesia has gone partly smooth, at least for diesel fuel for PSO (Public Service Obligation) sector. Although the other half of demand, the non-PSO, has not picked up significantly, the PSO quantity of 2.5 to 2.7 million Kilo Liters has enough to maintain the prices at this current level.
With better productions since a very dry season in 2015, crude oil prices has been improving in past years and market disturbance overseas, the Biodiesel policies in Indonesia would have to play another important part in near future to maintain or improve the price level. Indonesia, and maybe Malaysia too, need to produce another policy on Biodiesel to make sure market can absorb the growing production in Indonesia and Malaysia.

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Questions & Answers (10) :
Togar Sitanggang
6 years ago
@Samsudeen Ganny: hmm.. I can not really give any suggestion here because I am outside Malaysia but as Indonesia and Malaysia has already form CPOPC, it is very good to hear if Malaysia government can implement higher blending for biodiesel. This can show the rest of the world that we are both serious on implementing Biodiesel blending as one of ways to reduce emission. We fight together for EU regulations on RED II, hence it would be also nice to see that both countries use high blending biodiesel.
Togar Sitanggang
6 years ago
@Bit Kun: the B20 across all sectors will likely to take place, the question is whether it can be done starting Sept 1 as announced already. The revision of regulation is to accommodate support to all sectors but most probably not a permanent one.
6 years ago
Dear Pak Togar, in your opinion how likely is the B20 mandate across all sector to be enforced? and are these new mandate volume also entitle to claim the subsidy from CPO fund?
Samsudeen Ganny
6 years ago
Dear Mr. Togar What sort of policy revision on Biodiesel will you be proposing to Malaysia. I do believe you know how our subsidy structure and Petroleum companies work here in contrast to in Indonesia.
Togar Sitanggang
6 years ago
Apologize for Sharmene and HCLeow.. I tried to answer you on one comment and thought the spacing would nicely done, but it was not.
Togar Sitanggang
6 years ago
@sharmene: china demand of diesel oil that we know is about 175mio KL.. hence, if china use just B5 it will create demand nearly 9 mio KL of biodiesel. Its quite a big figure. Recently we have been shipping to China when price of biodiesel is almost at par with gasoil and expect will continue if price stays at it is now. India market is yet to pick up on biodiesel blending. @HCLeow: 1. if the B20 implementation across sectors starts in September, the 3.3m KL will surely there, in fact can go as high as 4mio KL by end of 2018. 2-3. Full year export volume can go up to 2 mio mt which depend on price difference with gasoil. And B20 above would expect CPO price to move up which would increase gap between biodiesel vs gasoil.. hence.. would loose market interest of biodiesel overseas.. by Oct or Nov.. the export figure might lower. Indonesia current main destinations for biodiesel are China and EU.
6 years ago
1. Do you think 3.3m kl domestic consumption target achievable? 2. What can we expect for the full year total Indonesia biodiesel exports volume? 3. Base on APROBI’s latest data, Indonesia exported 297,954 kl of biodiesel in June 2018, is this sustainable? And which countries are they exporting to?
6 years ago
Indonesia has strong interest in China’s biodiesel market. What is your personal view on China’s biodiesel potential. Can you share with us Indonesia biodiesel export to price sensitive countries like India and China in 2017.
Togar Sitanggang
6 years ago
basically one tonne of CPO is almost equal to one tonne of PME.. so, simple calculation is one to one. for September until December, it will requires additional one million tonne of CPO and one kilo liter equal to 0.87 tonne
gus Lim
6 years ago
How much PME can you get from one tonne of crude palm oil. How many tonnes of cpo is required to meet the expanded B20 mandate. One kilo-litre is equivalent to how many tonnes of PME.
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