Academic: B50 Programme a Strategic Step Towards Energy Self-Sufficiency

Indonesia holds a competitive advantage as one of the world’s largest producers of crude palm oil (CPO), with national production reaching around 53 million tonnes per year.

Jakarta (ANTARA) - The implementation of the Mandatory B50 Programme is a strategic step by the government to reduce Indonesia’s dependence on imported fuel whilst simultaneously achieving energy self-sufficiency at home.

Professor Tri Yuswidjajanto Zaenuri of the Bandung Institute of Technology (ITB) stated that the mandatory programme blending 50 per cent palm oil-based biofuel with diesel, known as the B50 Mandatory Programme, represents the government’s effort to optimise domestic natural resources, particularly crude palm oil (CPO), as a source of renewable energy.

“Indonesia holds a competitive advantage as one of the world’s largest CPO producers, with national production reaching around 53 million tonnes per year,” he said in a statement in Jakarta on Wednesday.

He added that this potential serves as an important asset in accelerating the development of biofuel, which will help Indonesia achieve energy self-sufficiency.

According to Tri Yuswidjajanto, energy self-sufficiency is a strategic necessity because Indonesia still relies on fuel imports to meet national energy needs.

This dependence not only burdens the country’s foreign exchange reserves but also increases vulnerability to external shocks such as rupiah exchange rate fluctuations, global oil price volatility, and the risk of embargoes or sabotage against energy supply chains.

“Therefore, the development of domestic resources such as biofuel must continue to be pursued so that we can achieve energy self-sufficiency. The B50 programme is one of the efforts to realise this,” he said.

Tri Yuswidjajanto believes the implementation of the B50 Mandatory Programme will have positive economic impacts, such as reducing diesel imports, saving foreign exchange, and improving the trade balance of the oil and gas sector.

According to data from the Ministry of Energy and Mineral Resources, the biodiesel programme between 2015 and 2025 has generated foreign exchange savings of Rp722.9 trillion and created added value of Rp114.7 trillion through the processing of CPO into biodiesel.

In addition, it has supported employment for up to 10.9 million people in the palm oil sector and contributed to a reduction in greenhouse gas emissions of 228.41 million tonnes of CO2.

“The B50 programme will increase palm oil farmers’ incomes and drive regional economic growth. Palm oil producing regions such as Sumatra and Kalimantan benefit from economic activity in the plantation sector and the biodiesel industry,” he said.

He reminded that the government needs to anticipate rising domestic demand from the biodiesel industry so that it does not disrupt supply for export needs or the domestic food industry, as CPO is the primary raw material for cooking oil.

In this regard, the Palm Oil Plantation Fund Management Agency (BPDP) is pushing for strengthening of the upstream sector to improve productivity, sustainability, and the competitiveness of the national palm oil industry.

These programmes include the Smallholder Palm Oil Replanting Programme (PSR), human resources development, research and development support, and the provision of plantation infrastructure and facilities.

“If more CPO is used domestically, export volumes will decline, meaning palm oil export earnings may also fall. Moreover, CPO is also used for cooking oil,” said Tri Yuswidjajanto.

Meanwhile, Eddy Martono, Chairman of the Indonesian Palm Oil Association (GAPKI), confirmed that the association fully supports the implementation of the B50 Mandatory Programme as it is highly strategic in reducing diesel imports and saving foreign exchange.

He assured that national CPO supply is secure enough to meet B50 requirements through the end of 2026, amounting to 1.74 million tonnes.

Eddy Martono added that GAPKI is committed to prioritising domestic needs for the B50 Mandatory Programme over fulfilling export demand abroad.

“We will certainly prioritise domestic needs first,” he said.