Biodiesel export tax exemption gives Indonesia edge

Feedstock competitiveness in the form of excise duty exemption for the export of biodiesel has given Indonesian producers an edge over biodiesel makers in Malaysia, sources said. At present, Indonesia imposes a 4% export tax on crude palm oil (CPO), but none on biodiesel, which sources said could be a move by the government to support biofuels development. The difference on the feedstock costs is estimated to be around US$35 per metric ton. This means if the international market price of crude palm oil is US$760 per metric ton, biodiesel producers in Indonesia can essentially buy CPO at a discount of US$35 per metric ton to international prices. (June 11, 2010)