PALMOILMAGAZINE, JAKARTA – As Indonesia shifts toward renewable energy, the success of the government’s mandatory B40 biodiesel policy hinges on one critical factor: domestic palm oil productivity. This was the key message from Deputy Chair of Commission IV of the House of Representatives (DPR RI), Panggah Susanto, in response to the implementation of the 40% biodiesel (B40) blend with diesel fuel, which took effect on January 1, 2025.
The policy, issued under Ministerial Decree of Energy and Mineral Resources (ESDM) No. 341.K/EK.01/MEM.E/2024, is funded by the Palm Oil Plantation Fund Management Agency (BPDPKS).
“This country has immense palm oil resources. The challenge is how to manage and maximize them to support energy security. We must increase palm oil productivity—not just for biodiesel, but also to maintain a balanced national food supply,” Panggah told Palmoilmagazine.com, citing Antara on Wednesday (June 25, 2025).
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The B40 mandate is projected to absorb around 15.6 million kiloliters of crude palm oil (CPO) annually. This significant volume must be balanced with domestic demands from the food sector—especially cooking oil—and other industries.
“We can’t let biodiesel demand compromise food availability for the public. Boosting plantation productivity is essential, and it won’t happen on its own. It requires state intervention and cross-ministerial synergy,” he added.
Panggah emphasized the need for strong coordination between the Ministry of Agriculture, which oversees upstream palm oil production, and the Ministry of Energy and Mineral Resources (ESDM), which handles downstream energy policy. Without such alignment, he warned, the B40 program could trigger disruptions in price and supply across various sectors.
He also underscored that B40 is not just an environmental initiative but a strategic move to reduce Indonesia’s reliance on imported diesel fuel, which has long burdened the national trade balance. With global geopolitical instability and rising energy security risks, Panggah cautioned that failing to develop renewable energy now would leave Indonesia vulnerable to external shocks.
Looking ahead to the government’s B50 target in 2026, he noted that such ambitions will mean little without strengthening the upstream foundation—namely smallholder palm plantations and their productivity.
As a member of Commission IV, which oversees agriculture, food, maritime affairs, and forestry, Panggah reminded that a large portion of Indonesia’s oil palm plantations are managed by small farmers.
“Productivity isn’t just about farming techniques—it’s about financing, replanting programs, access to quality seeds, training, and land tenure security. All of this must be supported. If farmers are not empowered, how can we expect a stable palm oil supply?” he stressed.
He called for the continuation and expansion of the Smallholder Palm Oil Replanting Program (PSR), which he believes is crucial to improving the quality and output of Indonesia’s palm oil sector.
While the government pushes for renewable energy, Panggah warned that domestic consumption must not be overlooked.
“Cooking oil is a basic necessity. We must not let prices surge because we’re too aggressive with biodiesel,” he said.
The solution, according to Panggah, lies in balancing productivity with supply allocation.
“If we can increase yield per hectare, energy needs can be met without sacrificing other sectors.”
He views the palm oil-based energy transition as a golden opportunity to achieve national energy sovereignty. But to succeed, he emphasized the need for coherent policies, political commitment, and sustained investment in upstream palm oil development.
“This is not just about energy—it’s about national self-reliance. The President has set a clear direction. Now it’s our turn to work together to make it a reality,” Panggah concluded. (P2)
