B50 Biodiesel Launch Could Reduce BPDP Levy to Rp32 Trillion
The Ministry of Energy and Mineral Resources (ESDM) has calculated that contributions to the Palm Oil Plantation Fund Management Agency (BPDP) will decrease to around Rp32 trillion per year following the implementation of the 50% biodiesel blend (B50) programme.
Eniya Listiani Dewi, Director General of New, Renewable Energy and Energy Conservation at the ESDM Ministry, stated that under the current B40 programme, BPDP levies stood at roughly Rp47 trillion. This means the B50 programme will reduce BPDP contributions by up to Rp15 trillion.
“It has decreased. Previously it was around Rp47 trillion, now it becomes Rp32 trillion,” she said when met at the Coordinating Ministry for Economic Affairs office in Jakarta on Thursday.
Additionally, the government has recalculated the incentive requirements for a full one-year period. She noted that the trend of budget efficiency had already been felt since the beginning of the second quarter of this year.
“The total calculation shows a reduction. Because the price difference for the incentive is no longer there. Since diesel prices are higher, FAME actually helps because the difference that was paid was a shortfall, but now it is higher, so there is no incentive,” she added.
Nevertheless, the ministry remains attentive to fluctuations in global crude oil prices, which could affect the subsidy budget for the remainder of 2026. Although the incentive burden has lessened, the government assures that BPDP funds remain in a secure position to support the launch of the mandatory B50 programme scheduled for 1 July.
“That will depend on future oil prices. But our calculations still show a slight increase, with diesel prices remaining somewhat high. We estimate the incentive will only be around Rp32.3 trillion for the year,” Eniya continued.
The ministry is currently finalising a Ministerial Decree regarding the allocation volume for B50 for the second half of this year. This regulation will serve as the legal basis for all business entities to implement the mandatory 50% palm oil blending in order to strengthen national energy security.
“It will be calculated in the Minister’s decree. So it will be included in the Minister’s decree. It has been calculated, just awaiting signature,” she concluded.