InfoSAWIT, JAKARTA — Indonesia’s smallholder palm oil farmers could bear the brunt of policy changes planned for 2026, as discussions intensify around raising export levies to fund a potential biodiesel mandate increase from B40 to B50.
The Indonesian Palm Oil Farmers Association (POPSI) warned that higher levies would erode export competitiveness and depress farmgate prices.
“If biodiesel policy is pushed too far toward B50, it risks damaging the palm oil ecosystem from upstream to downstream,” POPSI chairman Mansuetus Darto said.
Export levies currently range between US$75–95 per tonne, depending on global CPO prices. POPSI estimates that every US$50 increase in levies could reduce fresh fruit bunch (FFB) prices by Rp435 per kilogram.
POPSI also raised concerns about the sustainability of funding through the Palm Oil Plantation Fund Management Agency (BPDP), noting that farmer programs such as replanting, certification, and capacity building could be sidelined if B50 is imposed without alternative financing.
Economist Abra Talattov from INDEF said a comprehensive evaluation is needed before moving beyond B40, emphasizing that current conditions differ significantly from earlier biodiesel policy phases.
POPSI has proposed a flexible blending mechanism and cost-sharing model to protect farmers while maintaining energy transition goals. (T2)
