InfoSAWIT, JAKARTA – The government is preparing strategic measures to ensure the supply of Crude Palm Oil (CPO) meets domestic needs ahead of the implementation of the B50 biodiesel program in 2026. One option being considered is the implementation of a Domestic Market Obligation (DMO) for palm oil companies, which could potentially result in a reduction of export volume.

Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, explained that the government is contemplating a DMO scheme to ensure domestic CPO needs, particularly for biodiesel production, are met without relying on the export market.

"If CPO needs increase, there are only two choices: open new plantations or impose DMO on a portion of our exports," Bahlil said after a memorandum of understanding signing at the ESDM Ministry Office in Jakarta on Tuesday (14/10/2025).

The DMO policy requires businesses to fulfill domestic market needs before exporting their products. If this scheme is applied to palm oil, part of the CPO export supply will be redirected to meet the mandatory B50 biodiesel requirements—a government strategic program aimed at reducing diesel imports and strengthening national energy resilience.

Minister of Agriculture, Andi Amran Sulaiman, supported the policy, noting that the B50 program requires an additional CPO supply of 5.3 million tons per year.

"Our CPO production is about 46 million tons per year. Around 20 million tons are processed domestically, and 26 million tons are exported. So, a portion of that export will be diverted for the B50 need," Amran explained.

The B50 program, set to commence in the second half of 2026, is expected to significantly reduce diesel imports and strengthen Indonesia's position as a palm oil-based green energy producer. (T2)