In an effort to encourage and maintain viable biofuel production amid rising palm oil prices, the Indonesian National Biofuel Development Committee (NBDC) has proposed a tax cut in the form of reduction in value added tax (VAT). Palm oil is the main raw material for biodiesel in Indonesia, and its price has almost risen two-fold to about 783 Euros per tonne. NBDC secretary, Evita Legowo, says that the proposed tax cut has a mechanism that is similar to the palm oil export tax introduced in February this year. Under the mechanism of the palm export tax, “the government sets a 15% export tax if the price of crude palm oil (CPO) is between US$ 1,100 (about 693 Euros) and US 1,200 per tonne, 20% if the price is between $1,200 to $1,300 per tonne, and 30% if the price exceeds $1,300 per tonne..