InfoSAWIT, JAKARTA – The research team from the Pranata Pembangunan Research Center at the University of Indonesia (Pranata UI) released a study titled "Palm Oil Production, Market Dynamics, and Biodiesel Balance in Indonesia," underscoring the importance of a national biodiesel policy that is measurable, adaptive, and based on scientific data.
Dr. Surjadi, the lead researcher, stressed that the biodiesel policy needs to consider all factors affecting the national palm oil industry, from production capacity and export competitiveness to farmer welfare.
Indonesia is the world's largest producer and consumer of palm oil (CPO), with production reaching 48.2 million tons, about 54% of the global supply. However, production is only projected to rise slightly to 49.5 million tons in 2025. Meanwhile, the implementation of B50 requires a supply of around 59 million tons per year to meet domestic needs. This condition risks supply stagnation, potentially hindering the biodiesel program and pressuring export competitiveness.
The Pranata UI simulation indicates that while B50 implementation can save up to Rp 172.35 trillion in diesel import foreign exchange, it also risks reducing CPO exports by Rp 190.5 trillion. This imbalance is concerning for the trade balance and foreign exchange reserves.
Recommendation: Flexible and Balanced Policy
Dr. Surjadi recommended that the government not rush into full B50 implementation. According to the study, the ideal blend level is in the range of B35–B40, where the balance between energy needs, exports, and price stability can still be maintained without the need to raise the export levy.
"We suggest implementing a dynamic blending rate, which is a biodiesel blend policy that adjusts to the fluctuations in diesel, CPO, and FFB prices. This model has been successfully implemented in Brazil, Malaysia, and Thailand," he explained.
The study also emphasized the critical role of the Palm Oil Plantation Fund Management Agency (BPDP) in maintaining a balanced allocation of funds between biodiesel subsidies, the People's Palm Oil Rejuvenation (PSR) program, and cooking oil price stabilization. (T2)
