InfoSAWIT, KARAWANG – Indonesia's mandatory B50 biodiesel programme is expected to significantly strengthen domestic palm oil consumption, reduce fuel imports, and reinforce the country's energy security, according to Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia.
Speaking at the launch of the B50 Biodiesel Programme in Karawang, West Java, on Thursday (July 9), Bahlil said the higher biodiesel blending mandate will increase Indonesia's annual crude palm oil (CPO) consumption from approximately 15.2 million tonnes to between 16.3 million and 17 million tonnes.
According to Bahlil, the expanded domestic demand will provide a more reliable market for Indonesia's millions of oil palm smallholders, particularly during periods of weak international demand or declining export prices.
"If global prices fall or export demand weakens, we can absorb more of our CPO domestically through the B50 programme. This will help stabilize palm oil prices while providing market certainty for both the industry and smallholders," he said, as monitored by InfoSAWIT.
Beyond strengthening the domestic market, the minister projected that the B50 programme would generate approximately Rp170 trillion in foreign exchange savings by reducing diesel imports, exceeding the economic benefits achieved under the previous B40 mandate.
He noted that lower fuel imports would improve Indonesia's trade balance while accelerating the country's transition toward greater energy independence based on domestic renewable resources.
The policy is also expected to increase the added value of Indonesia's palm oil industry, with the sector's economic contribution projected to rise from Rp20.9 trillion to Rp23.49 trillion as biodiesel feedstock demand expands.
Employment across the palm oil supply chain is forecast to increase as well, with the number of jobs supported by the biodiesel programme expected to grow from approximately 1.8 million under B40 to around 2.1 million workers following the implementation of B50.
Environmental benefits also feature prominently in the government's projections. According to Bahlil, the higher biodiesel blend could raise greenhouse gas emission reductions from approximately 39.66 million tonnes of CO₂ equivalent to around 44 million tonnes of CO₂ equivalent, further supporting Indonesia's low-carbon development agenda.
The B50 fuel has already been introduced across several strategic sectors in five provinces, including mining, agriculture, rail transportation, maritime shipping, and industrial operations.
Bahlil revealed that companies previously hesitant to adopt the new biodiesel blend have now committed to supporting the programme. The government, he added, will continue monitoring compliance and may review business permits for companies that fail to implement the mandatory policy.
"We want domestically produced energy to become the primary choice. Indonesia should no longer depend on imported products when we have abundant resources of our own," he stressed.
Looking ahead, the government is preparing to launch a mandatory bioethanol blending programme beginning in 2027, initially targeting blends of 10% to 20% using feedstocks such as sugarcane, cassava, and corn. The programme will involve collaboration between Pertamina, state-owned enterprises, and private sector partners.
For Bahlil, the B50 programme represents far more than an increase in biodiesel content.
"B50 is not merely a blend of fossil fuel and biofuel. It reflects Indonesia's determination to stand on its own resources and build a truly independent energy future," he concluded. (T2)
