The country subsidises its biodiesel programme using proceeds from palm oil export levies
[JAKARTA] The timing of Indonesia’s launch of its B50 biodiesel mandate, which blends 50 per cent palm oil-based fuel with diesel, will be subject to the price gap between crude oil and crude palm oil, a senior official said on Tuesday (Jan 13).
Indonesia, the world’s largest palm oil producer, previously set a target to start the B50 mandate in the second half of 2026. The current mandate is a 40 per cent blend.
The country subsidises its biodiesel programme using proceeds from palm oil export levies. The amount of subsidy depends on the difference between crude oil and crude palm oil prices.
“This year, the guidance from the president is to maintain B40. For B50, reviews are being continuously conducted and we must monitor the difference between crude oil and crude palm oil prices,” coordinating minister of economic affairs Airlangga Hartarto told reporters.
“We are preparing for (implementation) in the second semester, however under current price conditions, the president’s directive is (to maintain) B40, but be ready for B50,” he added.
Airlangga said that tests continue regarding the fuel’s impact on automotive engines.
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An official with the energy ministry has previously said that Indonesia would likely increase its palm oil export levy.
A decision on the export levy could come in a few days, Airlangga said. REUTERS
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