Indonesia delays introduction of B40 biodiesel blending program

The Indonesian government has postponed the nationwide introduction of the B40 biodiesel blending policy, which requires blending 40% palm oil with 60% diesel, Oil&Fats International reports.

The measures were originally scheduled to come into effect on January 1, but authorities confirmed the postponement, giving businesses a six-week grace period to adapt and consume their remaining B35 fuel stocks. In addition, the government announced that the blending mandate will increase to B50 by 2026 and diesel imports are planned to be phased out completely.

The biodiesel program aims to reduce the country’s dependence on fuel imports while increasing demand for locally produced vegetable oils.

Meanwhile, the Indonesian Palm Oil Producers Association (GAPKI) has expressed concern that a new 10% export duty on crude palm oil (CPO) will make exports of the commodity less competitive, especially amid stagnant domestic production. In December, the government announced it would increase the export duty from 7.5% to 10% to fund higher subsidies for biodiesel.

According to January’s Oilseeds: Global Markets and Trade report by the U.S. Department of Agriculture (USDA), raising the blending mandate to B40 is expected to increase Indonesia’s industrial palm oil consumption by about 1 million tons year-on-year to a record 14.5 million tons in 2024/25, reducing the amount of palm oil available for export.

Tags: Indonesia, palm oil