Indonesian government considers raising POME export levy

It is seeking to increase the levy for palm oil waste products, including palm oil mill effluent (POME) and palm acid oil (PAO), reports PRIMA Markets.

PHOTO: Palm oil factory in Sumantra, Indonesia. Getty Images

PRIMA Markets is a biofuel specialist and partner with ENGINE on biofuel bunker price benchmarks. It reports that POME’s duty and levy are expected to “go up by $30/mt and would sit at $60/mt, at parity with that of crude palm oil (CPO)”, adding that this has yet to be confirmed by the Indonesian government.

A higher POME feedstock price in combination with Chinese anti-dumping duties would make biofuels more and more expensive, a European biofuel supplier said. 

POME is a by-product generated during palm oil production that can be further processed into POMEME by biodiesel refineries. POMEME-based biofuels are popular in Dutch ports as they qualify for advanced biofuel rebates through the Dutch HBE system. Any increase in Indonesia's export levy on POME could drive up the cost of POMEME-based biofuels.

The Indonesian Ministry of Trade is likely to announce the new measures tomorrow, Faris Razanah Zharfan, the founder of the Indonesian waste-based biofuel firm Beli Jelantah, told ENGINE.

Zharfan added that an increased levy for POME, PAO and other palm oil waste products is on the cards.

The European Commission’s recent announcement of provisional duties on Chinese biodiesel imports may have influenced Indonesia to increase its export levy. The duties, which came into force on 16 August, impose up to 36.4% duties on EU imports of biodiesel from China.

By Manjula Nair

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