PALMOILMAGAZINE, DEPOK — Indonesia’s B40 palm oil–based biodiesel program in 2026 is expected to deliver significant benefits beyond strengthening national energy security, including emissions reduction, improved farmer welfare, and substantial foreign exchange savings.
This was conveyed by Ernest Gunawan, Secretary General of the Indonesian Biofuel Producers Association (Asosiasi Produsen Biofuel Indonesia/APROBI), during the Journalists Workshop on the 2026 Palm Oil Biodiesel Program, attended by Palmoilmagazine.com on Thursday (February 5, 2026).
According to Ernest, biodiesel demand under the B40 mandate in 2026 is projected to reach between 15.4 million and 15.62 million kiloliters, equivalent to around 98 million barrels or roughly 163 days of Indonesia’s crude oil production. Supply will be met by 26 domestic biodiesel producers with a combined installed capacity of 22.02 million kiloliters, indicating that industry capacity remains more than sufficient.
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“The B40 program is not just about energy substitution. It is a strategic instrument to boost palm oil smallholder incomes while ensuring the long-term sustainability of the industry,” Ernest said.
Economic and Environmental Impact
APROBI estimates that the implementation of B40 could reduce greenhouse gas emissions by up to 42 million tons of CO₂ equivalent, representing around 12 percent of the energy sector’s enhanced Nationally Determined Contribution (NDC) target for 2030.
From a socio-economic perspective, the program is expected to support approximately 1.9 million jobs in upstream activities, as well as 14,730 off-farm workers across related sectors.
Replacing imported diesel fuel with palm oil–based biodiesel could also generate foreign exchange savings of about IDR147.5 trillion, equivalent to USD 9.33 billion.
“These economic benefits are a strong justification for maintaining the continuity of the biodiesel program,” Ernest said.
Sustainability and Certification
Ernest emphasized that sustainability remains a core priority for biofuel producers. Currently, around 57 percent of the world’s certified sustainable palm oil plantations are located in Indonesia, including those certified under global standards such as the Roundtable on Sustainable Palm Oil (RSPO).
At the national level, sustainability frameworks continue to be strengthened through various regulations and standards. These include policies issued by the Coordinating Ministry for Economic Affairs, the implementation of downstream ISPO standards by the Ministry of Industry, and the ISPO Bioenergy standard overseen by the Ministry of Energy and Mineral Resources (ESDM).
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Biodiesel producers, Ernest added, are also continuing to develop processing facilities using cleaner and more environmentally friendly technologies.
Challenges Ahead in 2026
Despite its positive outlook, Ernest acknowledged several challenges in implementing the biodiesel program in 2026. These include ensuring sufficient crude palm oil (CPO) feedstock availability, improving biodiesel handling and storage quality, and strengthening logistics systems from production sites to supply points.
“Based on past experience, proper handling and storage quality are critical. This requires close collaboration among all stakeholders,” he said.
On pricing, APROBI has encouraged efforts to narrow the price gap between diesel fuel and biodiesel, while noting that incentive support remains necessary to sustain the program. Regarding plans for B50 testing and potential implementation, biodiesel producers expressed full support for engine performance and road tests, but stressed the need for more comprehensive studies that take into account technical and economic considerations.
“With strong policy alignment, industry commitment, and stakeholder collaboration, we are confident that palm oil–based biodiesel will continue to serve as a backbone of Indonesia’s energy transition,” Ernest concluded. (P2)
