PALMOILMAGAZINE, JAKARTA — A significant price disparity between crude palm oil (CPO) and diesel fuel—key components in biodiesel production—has prompted Indonesia’s Plantation Fund Management Agency (BPDP) to revise its funding allocation for the national biodiesel mandate program.
Coordinating Minister for Economic Affairs, Airlangga Hartarto, revealed that budget adjustments became a central topic during a coordination meeting with BPDP held on Wednesday (July 23) in Jakarta. The session also addressed proposals from the Ministry of Trade and the Ministry of Foreign Affairs concerning research and development in the palm oil sector.
“BPDP’s budget was the main point of discussion,” Airlangga told the media briefly after the meeting.
Eniya Listiani Dewi, Director General of New and Renewable Energy and Energy Conservation (EBTKE) at the Ministry of Energy and Mineral Resources (ESDM), added that the price gap between CPO and diesel recently soared to as high as Rp6,400 per liter—recorded just last month.
“This calls for additional funding, which will be sourced from BPDP. It’s purely a matter of reallocation,” Eniya explained, as quoted by Palmoilmagazine.com from Media Indonesia on Thursday (July 24, 2025).
Despite the widening price gap, BPDP President Director Eddy Abdurrachman assured that the agency still has sufficient reserves to cover the increased costs of biodiesel production. He emphasized that the additional funding requirements would not compromise other BPDP programs.
“Our funding still matches the needs. Other programs remain unaffected. We have sufficient resources,” Eddy stated.
Plans to Extend Levies to Cocoa
In the same meeting, Eddy also disclosed the government’s plan to broaden the scope of export levies and duties—not just for palm oil, but also for cocoa commodities. The move aligns with existing regulations that mandate BPDP to manage funds for both coconut and cocoa sectors.
Levy proceeds from cocoa will be used to support various development programs, including replanting, infrastructure provision, and farmer training.
“This has been approved by the Steering Committee. We’re now just waiting for the Ministry of Finance Regulation (PMK) to be issued. It’s currently under public review and harmonization. We’re aiming to complete the process within two months,” Eddy said.
With the revised funding strategy and expanded BPDP mandate into the cocoa sector, the government hopes to keep advancing its downstreaming and sustainability initiatives in plantation industries—despite ongoing challenges such as volatile commodity prices and dependence on fossil fuels. (P2)
