PALMOILMAGAZINE, JAKARTA – Biodiesel industries in Indonesia have rapidly developed since the 2025 policy mandating biodiesel-diesel blending was introduced. The government’s proactive approach, through initiatives like the B35 program and plans to increase the blend to B100, has been a major driver of this growth.
Wiko Saputra, a researcher in palm oil biodiesel governance, noted that a nationwide biodiesel program could greatly enhance domestic energy security by leveraging local resources. However, Wiko also pointed out technical challenges in the field that could hinder palm oil production growth.
“To realize B40, an additional 2.5 million tons of crude palm oil (CPO) is needed,” he said at the Biodiesel Sustainability Discussion, with the theme ‘Realizing Smallholder and Biodiesel Industry Partnerships in the Development of Palm Biodiesel for the Welfare of Palm Smallholders’, Thursday (24/10/2024) in Jakarta.
He thought, the independent smallholders would play the significant roles to support biodiesel industries rather than only focusing to minimize the exports. For biodiesel got increased in demands, CPO needs did too. It is assumed that biodiesel demands get increased about 3% per year, CPO needs for biodiesel industries in this country would be reaching 34,35 million metric tons (MT).”
Indonesia has the big potential in the independent plantations that laid on 5,31 million hectares that could produce up to 14,87 million MT CPO per year or equal to 13,91 million kiloliters of biodiesel every year. Be said biodiesel supply chain model could not enable the independent smallholders to get additional values maximally. He proposed the new model that may enable them to supply their plantation production to mini palm oil mills that belonged to the smallholders’ groups and directly supply to PT Pertamina as the offtaker for biodiesel.
He also thought, many independent smallholders’ plantations got decreasing productivity and needed replanting. On the other hand, their institutions were weak still, the regulation about mini palm oil mill permit, was the issue, their knowledge about downstream sectors needs to get increased. Their data about name and address were not complete still and made the government difficult to confirm area preparation, legal, and preparedness to support biodiesel industries.
He also mentioned it would need to conduct strategic things to reinforce their plantation in biodiesel supply chain. If these succeed, there would be bigger advantages for them to escalate the sustainability in biodiesel industries in Indonesia. (P2)
