July 30 International Fertilizer and Agriculture News

Indonesia Sets Biodiesel Production Volumes for B50

According to documents obtained by Argus, Indonesia’s Ministry of Energy and Mineral Resources (ESDM) today allocated production volume targets to domestic biodiesel producers to implement its 50% fossil diesel-biodiesel blend mandate, known as B50.

ESDM has allocated a total of 16.7 million kiloliters to 26 biodiesel producers for 2026 to meet the B50 target, up from the 15.6 million kiloliters allocated at the beginning of the year for the original B40 target. Although the mandate officially took effect at the beginning of the month, biodiesel producers spent much of July waiting for updated production allocations under the new B50 target.

Of the total allocated volume, the ministry instructed producers to supply 8.2 million kiloliters of subsidized biodiesel to the public service obligation (PSO) sector, mainly covering public transport, public services, agriculture, and micro-enterprises. The remaining 8.5 million kiloliters must be supplied to the non-PSO sector, including commercial industry, private transport, general mining, manufacturing, and power plants.

Indonesia’s plantation fund management agency BPDPKS uses export levies on palm oil and related products to cover the price difference for biodiesel delivered to the PSO sector, bridging the price gap between biodiesel and fossil gasoline. It transfers funds to biodiesel producers on the condition that they supply biodiesel to fuel distribution companies at the cost of regular gasoline. Fuel distributors then supply blended biodiesel and gasoline to consumers.

Q&A: Fuella Bets on the Long-Term Future of Green Ammonia

Norwegian developer Fuella is advancing a series of renewable ammonia projects in Norway, Brazil, and Canada, with its flagship Skipavika development project approaching final investment decision (FID). But Fuella says regulatory uncertainty and slow implementation of key policies such as the EU’s revised Renewable Energy Directive (RED III) continue to hinder investment decisions and offtake commitments.

Argus spoke with Fuella’s commercial head Marco Querci about the status of the company’s projects, its commitment to ammonia as a hydrogen derivative, and the importance of clear policy signals. The following are edited highlights:

Can you introduce the current status of Fuella’s projects?

We started in Norway, where our most advanced project is located. The next projects are two plants in Brazil, and recently we added the Quebec project. The Skipavika project is our flagship project on Norway’s west coast near Bergen, located in an industrial zone. The plant is around 130 MW and will produce 100,000 tonnes of ammonia per year. We completed front-end engineering design (FEED) in 2024, and the project is largely ready for construction. Since then, we have focused on optimization, particularly cost and competitiveness. We continue to work with our long-term partner and investor, German utility EnBW, while also evaluating additional contractors. We are still aiming to reach FID in the coming months.

How are the two Brazilian projects progressing?

Brazil is where we are taking the Skipavika approach and scaling it up. These plants are about four times the size of the Norwegian project, with annual capacity of around 400,000 tonnes. Brazil is one of the few regions that can combine high-quality wind and solar resources with a hydropower backbone. Being able to generate and use baseload power allows the ammonia loop to operate in a conventional way. If you rely on fluctuating wind and solar power generation, even with hydrogen buffering, the ammonia loop has to adapt. Historically, ammonia plants were not designed for such high fluctuation. We are advancing both projects simultaneously and are currently carrying out pre-FEED work. The significant synergies between them mean we can develop relatively similar plant designs.

Is the Quebec project the newest addition?

Yes. Quebec is a natural choice among the regions we explored in Europe, Brazil, and Canada. It is not only a strategic choice, but also a clear decarbonization logic. Green molecules should first be developed in regions where grid structures are already renewable. This approach fits companies like ours very well. We are not a large renewable power developer entering hydrogen and ammonia. We are a hydrogen-focused company, which helps us remain specialized.

What will the company focus on over the next 12-18 months?

We believe we have built a very competitive and promising project portfolio. While bringing projects to FID is the clear objective, we are also looking for investment and technology partners, mainly on the investment and technology sides.

What are the main challenges in developing these projects?

Our projects are designed with ease of execution in mind, so from a local development perspective, we have not encountered major challenges. Technical studies, permitting, and engineering have progressed relatively smoothly. The key challenge for all projects is the offtake market.

Regulation plays a key role, and regulatory uncertainty over the past few years has become a major obstacle to investment. RED III has not yet been fully implemented in many markets for the industrial sector, while implementation of transport targets has been significantly delayed. There is also uncertainty around the EU Carbon Border Adjustment Mechanism (CBAM) and the exclusion of fertilizers. We are seeing some improvement, but without clear regulation, the economic incentive to procure green molecules remains limited.

Skipavika is a good example. We completed FEED in 2024, and in a more mature regulatory environment, we might already have moved into construction. We believe first movers can gain real advantages before the market scales up by accumulating expertise, project maturity, and operational knowledge.

As an ammonia producer, what would you like to see on the regulatory side?

We welcome the implementation of RED III transport targets. Although transport is not necessarily the most natural market for ammonia, it is still a positive signal. At the same time, hydrogen, and especially ammonia, plays a major role in hard-to-abate sectors where electrification is not an option. Fertilizers and chemicals are natural markets, and replacing gray ammonia with green ammonia is one of the most effective decarbonization pathways.

We would like to see implementation of RED III for industry move forward as quickly as possible. Schemes such as Spain’s approach, which allows transport targets to be met through renewable fuels of non-biological origin generated by industry, appear pragmatic. We would welcome similar initiatives elsewhere. Another possibility is to shift more of the burden to the consumer side, reducing the impact on industrial competitiveness. The willingness of traditional ammonia consumers to pay a premium has increased largely because of CBAM implementation. The shipping sector is also growing, especially through FuelEU Maritime.

Of course, ammonia can also be used as a transport medium and then cracked back into hydrogen, for example at refineries. This is less efficient, but if incentives and regulations push the market in that direction, it is better than no decarbonization. Ultimately, we remain open to end-use markets.

How do you view the impact of recent geopolitical developments?

Disruptions and conflicts have pushed up the cost of fossil fuel alternatives. This improves the competitiveness of green molecules. We think this price pressure may continue. Much of the ammonia and LNG supply has been disrupted, and replacing those capacities will take time. Overall, we expect the ammonia market to remain relatively tight in the medium term, supporting higher prices and strengthening the economic case for green ammonia.

The current situation also highlights the importance of strengthening local production and choosing the right partners. From a European perspective, as we decarbonize and focus on reducing reliance on fossil fuels, we should also ensure supply security, rather than replacing one dependency with another.

How do you assess ammonia cracking technology and related progress?

The good news is usually the bad news, but in this case there may also be a positive side, namely that developing and building production assets takes a long time. Cracking infrastructure also takes time, but as far as we know, the construction cycle may be slightly shorter than for production facilities, which helps simplify supply chain development. We believe ammonia cracking capacity is gradually improving, technology is advancing rapidly, and its efficiency is increasingly understood.