PALMOILMAGAZINE, JAKARTA – The government is deploying a task force to ensure the proper implementation of the 40% biodiesel (B40) mandate, which officially took effect on January 1, 2025. This task force comprises the Palm Oil Plantation Fund Management Agency (BPDPKS), the Plantation Fund Management Agency (BPDP), and the Directorate General of New Renewable Energy and Energy Conservation (EBTKE) under the Ministry of Energy and Mineral Resources (ESDM).
Director General of EBTKE, Eniya Listiani Dewi, announced that the task force will begin inspections next week to verify technical aspects of B40, including volume, water content, color, and fuel density, ensuring compliance with government regulations.
“Next week, we will deploy inspectors to oversee field implementation,” Eniya stated in an official release on Friday (January 31, 2025).
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She clarified that this monitoring effort is a preventive measure rather than a response to any detected violations. A major concern is the absence of financial incentives in the B40 program, which could impact its execution.
“We are taking precautionary steps to ensure proper implementation. Since there are no financial incentives for B40, we want to prevent situations where it is available but not used as intended,” she explained.
Foreign Exchange Savings
The government has set a target of 15.6 million kiloliters (kl) of biodiesel allocation for 2025. Of this amount, 7.55 million kl is designated for the Public Service Obligation (PSO) sector, while 8.07 million kl is allocated for the non-PSO sector.
Eniya highlighted the significant foreign exchange savings that the B40 mandate can generate. Compared to B35, the B40 program could save an additional IDR 25 trillion by reducing diesel fuel imports.
“With B40, foreign exchange savings are expected to reach IDR 147.5 trillion, compared to IDR 122.98 trillion with B35. This means an extra IDR 25 trillion saved from reducing diesel imports,” she explained.
Regarding pricing impacts, Eniya noted that the price difference between biodiesel and conventional diesel could raise costs for non-PSO consumers. The price of B40 is estimated to increase by approximately IDR 1,500 to IDR 2,000 per liter for non-PSO consumers, who are currently paying around IDR 13,000 per liter.
Despite potential price increases, the government assured that the B40 policy will have minimal impact on inflation. Studies indicate that the price adjustments from B40 implementation would only contribute around 0.2% to inflation.
“Our research shows that the impact on inflation is negligible, at only around 0.2%. Experts agree that this will not significantly affect overall inflation,” she concluded.
With strict monitoring in place, the government aims to ensure the smooth execution of the B40 mandate, strengthening national energy security while reducing dependence on imported fuel. (P2)
