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JAKARTA, Jan 31 (Reuters)Indonesia’s palm oil fund (BPDPKS) estimated that 30.22 trillion rupiah ($2.02 billion) would be needed to subsidise palm oil-based biodiesel distribution in 2023, the fund’s chief Eddy Abdurrachman said on Tuesday.

Indonesia will increase its content of palm oil based fuel in biodiesel to 35% (B35) on Feb. 1, up from a 30% blend currently.

The fund collects levies from palm oil exporters and uses the proceeds to subsidise Indonesia’s palm oil mandate and other programmes such as palm replanting schemes.

The estimated biodiesel subsidies this year would be lower compared to 2022’s subsidy of 34.67 trillion rupiah, despite the higher palm oil blend, due to a narrower gap between the costs of palm-based fuel and fossil diesel fuel, Eddy said.

This year, consumption of fatty acid methyl ester (FAME), the fuel made from palm oil, is seen at 13.15 million kilo litres (KL), up from last year’s 10.4 million KL.

($1 = 14,975.0000 rupiah)

(Reporting by Bernadette Christina Munthe Editing by Ed Davies Writing by Fransiska Nangoy; Editing by Himani Sarkar)

((Fransiska.Nangoy@thomsonreuters.com;))

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