InfoSAWIT, JAKARTA – Indonesia's mandatory B50 biodiesel program is expected to strengthen the country's palm oil downstream industry and energy security, but lawmakers have warned that its success will depend on maintaining adequate domestic crude palm oil (CPO) supplies.
Member of the House of Representatives (DPR RI) Commission IV, Endang Setyawati, said the government's decision to implement B50 demonstrates the increasingly strategic role of palm oil, not only as a major export commodity but also as a key feedstock for Indonesia's renewable energy transition.
Speaking during a parliamentary hearing with the Minister of Agriculture and the Head of the National Food Agency in Jakarta, Endang expressed full support for the B50 mandate while urging policymakers to carefully manage future CPO availability.
"We fully support the implementation of the mandatory B50 program based on crude palm oil. However, the Ministry of Agriculture must also ensure sufficient national CPO supplies," she said.
The Gerindra Party legislator noted that rising biodiesel demand is expected to significantly increase domestic palm oil consumption, making long-term supply planning essential.
Government projections indicate that the B50 mandate could increase the added value generated by Indonesia's CPO industry from approximately Rp20.92 trillion to Rp23.49 trillion. Domestic CPO consumption is also forecast to rise by 1–2 million metric tons annually, potentially tightening export supplies while providing stronger price support in the global market.
Despite these promising prospects, Endang emphasized that authorities must anticipate future challenges, including long-term feedstock availability, biodiesel distribution infrastructure, and the potential impact on domestic food prices.
She stressed that increased CPO use for biodiesel should not lead to higher cooking oil prices or undermine national food security.
Industry observers view the B50 policy as one of the most significant structural drivers for Indonesia's palm oil sector in recent years. Besides expanding domestic demand, the program is expected to accelerate downstream investment, reduce oversupply risks, and enhance long-term price stability.
As more CPO is absorbed by the domestic energy sector, national inventories are projected to become more balanced, strengthening the palm oil industry's contribution to Indonesia's energy resilience while creating greater economic value across the supply chain. (T2)
Source: Parlementaria.
