Energy and Mineral Resources Minister’s Regulation No.66/2018 Stipulates B20 Mandatory Use

In a bid to follow up Presidential Regulation (Perpres) Number 66 of 2018 on the Second Amendment to Presidential Regulation Number 61 of 2015 on Collection and Use of Palm Oil Plantation Funds, Ministry of Energy and Mineral Resources deemed it necessary to restipulate provisions on procurement of biofuel in the form of biodiesel, along with its verification, supervision, and sanctions as referred to in Minister of Energy and Mineral Resources Regulation Number 26 of 2016.

In that consideration, Minister of Energy and Mineral Resources Ignasius Jonan on Thursday (23/8) signed  Minister of Energy and Mineral Resources Regulation Number 41 of 2018 on the Procurement and Utilization of Biofuel in the Form of Biodiesel for the Purposes of Financing by the Palm-Oil Plantation Fund Management Agency.

The Minister Regulation stipulates that Fuel Business Entities are obliged to mix biodiesel with diesel fuel based on the percentage of minimum utilization set by Minister of Energy and Mineral Resources.

“Fuel Business Entities as intended include: a. Fuel Business Entities owning refinery and producing diesel fuel, and b. Fuel Business Entities importing diesel fuel,” Article 3 paragraph (2) of this Minister Regulation reads.

According to the Regulation, procurement of biodiesel is implemented for a mixing of: a. certain types of fuel; and b. general types of fuel, and must be executed once every 12 (twelve) months, starting from January and the procurement process must be started no later than 90 (ninety) days before the procurement period.

Director General for Oil and Gas then will submit the list of Fuel Business Entities which will procure biodiesel for the Purposes of Financing by the Palm-Oil Plantation Fund Management Agency hereinafter referred to Fund Management Agency to the Ministry’s Energy Conservation and Renewable Energy Director General.

Afterwards, after verification process performed by Evaluation Team for Procurement of Biodiesel, the Minister will stipulate the list of Fuel Business Entities and Biodiesel Business Entities along with the volume of biodiesel allocated to each Fuel Business Entities.

“Biodiesel Business Entities obtaining the stipulation are obliged to distribute biodiesel to Fuel Business Entities based on: a. volume of biodiesel allocated; and period and specification of biodiesel agreed in the contract,” Article 10 paragraph (10b) of this Minister Regulation reads.

Biodiesel Business Entities that have signed contract with Fuel Business Entities and have distributed  biodiesel, based on this Regulation, reserve the right to receive Fund to Finance Biodiesel from the Palm-Oil Plantation Fund Management Agency.

“Fund to be used to Finance Biodiesel will be disbursed to Biodiesel Business Entities as intended in a period no more than 1 (one) month after Fund Management Agency received the verification,” Article 15 reads.

The Minister Regulation also stipulates that Fuel Business Entities that do not mix biodiesel with diesel fuel will be imposed administrative sanction in the form of a fine of Rp6,000 of every liter fuel that must be mixed with biodiesel, and/or revocation of business permit.

The administrative sanction as intended is stipulated by the Minister through Director General of Oil and Gas.

In the event of an increase of diesel fuel sales, according to this Minister Regulation, biodiesel volume allocation that has been determined by the Minister can be adjusted.

With the issuance of this Minister Regulation, the period of biodiesel procurement by State-owned Oil and Gas Company Pertamina as well as chemical and petroleum distributor, PT AKR Corporindo Tbk, in the framework of biodiesel financing for May to October 2018 is adjusted to a period from May to December 2018.

This Minister Regulation shall apply as of the date of its promulgation,” reads Article 28 of Minister of Energy and Mineral Resources Regulation Number 41 of 2018 which is stipulated by Director General of Law and Regulations of Ministry of Law and Human Rights Widodo Ekatjahjana on the date of  August 24^th 2018.

(JDH Kementerian ESDM/ES) (RAS/MMB/Naster)