United States Rejects Palm Oil Fuel, But Indonesian Producers Are Unfazed
Jakarta Globe & Antara | February 17, 2012
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Indonesia’s crude palm oil producers said on Friday that they were not worried about a drop in demand even after the US Environmental Protection Agency declared palm-oil based biodiesel unfit to join the United States’ renewable fuel program.
The agency said on Jan. 28 that when palm-oil based biodiesel replaces petroleum diesel fuel, it can only reduce emissions by 17 percent, lower than the agency’s 20 percent minimum.
Still, Indonesia’s crude palm oil producers are staying calm. The United States consumes more energy than any other country in the world,
“We can still export CPO [crude palm oil] to the US — it’s just that we may lose prospective US buyers who had wanted to process CPO into biodiesel,” Fadhil Hasan, chairman of the Indonesian Palm Oil Association (Gapki), said on Friday.
“And that’s also only if our government fails in its rebuttal,” he added.
The Indonesian government and other parties with an interest in the US palm oil sector can scientifically challenge the US agency’s notification until March 28. Last week, Trade Minister Gita Wirjawan said his department is gathering evidence to do so.
Even if that fails, Indonesia’s producers say the United States is not one of its major markets.
“It [the agency’s decision] has no big impact on our company’s activity because exports to the United States are only 5 percent of our total exports,” Tarmin, a general manager at Wilmar Group, a Singapore-listed CPO producer with operations in Indonesia, was quoted by Antara as saying on Friday. Wilmar exports most of its CPO to India, Pakistan and China.
American companies use CPO from Indonesia not only for biofuel but also for cosmetics and food-related products.
According to Gapki data, Indonesia shipped 62,000 tons of CPO to the United States in 2011, at a total value of $68.2 million.
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