InfoSAWIT, JAKARTA — Funding needs for Indonesia’s proposed B50 biodiesel mandate are projected to reach Rp65 trillion if the 50% biodiesel blending programme is implemented starting in the first semester of 2026 for a full fiscal year, according to energy experts amid plans to expand the national biodiesel mix.
Ali Ahmudi Achyak, head of the Energy Security for Sustainable Development Study Group (K3EPB) at the University of Indonesia, estimated that even if the programme runs only for six months in the second half of 2026, incentive funding would still range between Rp32 trillion and Rp38 trillion.
He said the planned increase in crude palm oil (CPO) export levy to 12.5% could become one of the main funding sources, but its adequacy would depend heavily on global CPO price movements.
“Technically, a 12.5% CPO export levy could help finance B50 incentives, but it may not be sufficient and remains highly dependent on global CPO prices,” he said, as reported by Bloomberg Techno and quoted by InfoSAWIT, Saturday (31/1/2026).
Ali noted that funding sufficiency would be more secure if international CPO prices stay in the range of US$800–US$900 per tonne, export volumes remain stable, and the higher levy is fully implemented.
However, he warned that sharply rising CPO prices could widen the price gap between biodiesel and fossil diesel, automatically increasing subsidy requirements. If CPO prices climb above US$1,000 per tonne while crude oil prices weaken, incentive needs could exceed earlier projections.
The government previously confirmed that the CPO and derivative product export levy will rise to 12.5% starting March 2026 from 10%, coordinated by the Coordinating Ministry for Economic Affairs. Currently, the biodiesel mandate remains at B40 level, with B50 pending road test results.
Indonesia’s biodiesel incentives are managed by the Oil Palm Plantation Fund Management Agency, financed partly through CPO export levies.
Separately, the Ministry of Energy and Mineral Resources has set the 2026 B40 incentive budget at Rp47.2 trillion for a volume of 15.64 million kilolitres. The allocation is higher than the initial 2025 budget but below last year’s realised spending of Rp51 trillion. Officials said B50 funding needs will be determined after road trials are completed, with B50 implementation targeted for decision in the second semester of 2026. (T2)
