InfoSAWIT, JAKARTA — The government’s plan to increase the biodiesel blending mandate from B40 to B50 has once again sparked debate among economists and industry players. On one hand, the policy is seen as a progressive step toward energy self-sufficiency based on domestic resources. On the other, analysts warn of potential fiscal burdens, pressure on export competitiveness, and risks of market distortion.
The proposal to raise the palm oil biodiesel mandate from B35 to B50 has drawn mixed responses, including from Institute for Development of Economics and Finance (INDEF). Abra Talattov, Head of INDEF’s Center for Food, Energy, and Sustainable Development, emphasized that any move toward B50 must be preceded by a comprehensive evaluation of previous policy implementation.
“The plan to raise the mandatory blend to B50 should only be taken after a thorough evaluation of the implementation of Presidential Regulation No. 132 of 2024. We must recognize that current conditions differ significantly from those at the time earlier policies were introduced,” Abra told InfoSAWIT recently in Jakarta.
He explained that when the biodiesel policy was first introduced, crude palm oil (CPO) prices were at a low point, and the government’s motivation was largely to protect farmers from falling prices. Today, however, market conditions have changed: global crude oil prices tend to decline, while CPO prices remain relatively stable.
“In this situation, there will be additional risks related to the need for biodiesel incentives. The impact will not only be felt by the industry, but also by the state’s fiscal burden,” he said.
Abra argued that before deciding to fully implement B50 in 2026, the government should consider multiple scenarios. A careful evaluation would help determine whether the policy should be fully enforced, implemented gradually, or even postponed if the cost burden proves too high.
“The evaluation results must form the basis for rational and objective decision-making. If they show that the fiscal and industrial burdens are excessive, then policy adjustments—either lowering or delaying the B50 target—should be considered,” he concluded. (T2)
For more details, read InfoSAWIT Magazine, November 2025 edition.
