PALMOILMAGAZINE, JAKARTA – Indonesia’s Trade Minister, Budi Santoso, emphasized the importance of crude palm oil (CPO) as a key raw material in supporting the mandatory implementation of 40 percent biodiesel (B40). The evaluation aims to ensure domestic raw material availability while optimizing the export ratio of CPO.
“We need to assess the CPO demand for B40 first. If necessary, adjustments to the export ratio can be made depending on the study results,” Budi stated during the 2024 Achievements and 2025 Work Program Press Conference in Jakarta.
B40 is a biofuel composed of 60 percent diesel and 40 percent palm oil-based biofuel. This initiative aims to support the transition to green energy while maximizing domestic resources.
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Budi also noted that the Ministry of Trade will continue to evaluate raw material needs for B40 as well as domestic cooking oil requirements. “We strive to balance our policies to ensure domestic needs are met, both for biofuel and cooking oil,” he explained.
For 2025, the government targets B40 biodiesel production at 15.6 million kiloliters (kl). Of this, 7.55 million kl is allocated for public service obligation (PSO), while 8.07 million kl is designated for non-PSO needs.
The implementation of the B40 mandate is regulated under Ministerial Decree No. 341.K/EK.01/MEM.E/2024 issued by the Ministry of Energy and Mineral Resources (ESDM). The policy seeks to expand biofuel utilization and secure funding from the Palm Oil Plantation Fund Management Agency.
The biodiesel distribution process will involve 24 Biofuel Business Entities (BU BBN), two Oil Fuel Business Entities (BU BBM) for PSO and non-PSO, and 26 additional BU BBM for non-PSO distribution.
This program is a critical component of the government’s broader strategy to reduce reliance on fossil fuels and strengthen Indonesia’s position as the world’s leading palm oil producer. However, Budi stressed that the program’s implementation must align with fulfilling domestic needs.
“This initiative not only supports the energy transition but also bolsters the national economy by maximizing domestic potential,” he concluded. (P2)