Palm Oil Magazine, JAKARTA – The Indonesian government has reaffirmed that the mandatory B50 biodiesel program, which took effect in July 2026, remains a cornerstone of its national palm oil strategy, while assuring that the Palm Oil Plantation Fund Management Agency (BPDP) has sufficient financial resources to support biodiesel incentives alongside other key industry programs.
Speaking to reporters after the Indonesia Palm Oil Research Week (PERISAI) 2026, attended by Palm Oil Magazine in Jakarta on Monday (July 20, 2026), Dida Gardera, Expert Staff for Connectivity and Service Development at the Coordinating Ministry for Economic Affairs, said the government is continuously reviewing the implementation of the B50 mandate and its implications for palm oil fund revenues, exports, and prices received by smallholders.
According to Dida, the government is also reassessing the accuracy of Indonesia’s national palm oil production data to ensure future policy decisions are based on more reliable information.
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“The biodiesel mandate remains a priority. At the same time, the government continues to safeguard cooking oil availability while supporting the development of smallholder plantations,” he said.
Dida noted that Indonesia’s experience with the B40 biodiesel mandate throughout 2025 increased domestic palm oil consumption by approximately 3–4 million metric tons. Despite the additional domestic demand, Indonesia’s export performance remained resilient.
“Exports continued to perform well, allowing the balance between domestic consumption and international markets to be maintained,” he explained.
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He said the outcome demonstrates that the biodiesel program can enhance the value of Indonesia’s palm oil industry without undermining export competitiveness or disrupting domestic cooking oil supplies.
Beyond financing biodiesel incentives, BPDP funds continue to support a broad range of strategic initiatives, including cooking oil subsidies, research and development, human resource capacity building, scholarship programs, and the Smallholder Palm Oil Replanting Program (PSR).
Dida acknowledged that the PSR program still faces several challenges, particularly in administrative procedures and field implementation. Nevertheless, the government remains committed to accelerating the program’s execution.
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“As long as funding requirements can be met, BPDP will continue allocating financial support to priority programs, including the Smallholder Palm Oil Replanting Program,” he emphasized.
Looking ahead, Dida said the government will continue periodically evaluating palm oil policies, including the impact of adjustments to export levies on crude palm oil (CPO) prices and fresh fruit bunch (FFB) prices received by farmers.
He added that, so far, the higher export levy has not negatively affected Indonesia’s palm oil market. Instead, FFB prices at the farm level have continued to strengthen, supported by robust demand from both domestic processors and export markets.
“Fresh fruit bunch prices have continued to rise. This indicates that current policies are still capable of maintaining a healthy balance within Indonesia’s palm oil industry,” Dida concluded. (T2)
