B50 Biodiesel Programme: Expert Urges Government to Improve Upstream Palm Oil Sector

The government’s plan to implement a mandatory B50 biodiesel programme is considered a strategic step to strengthen national energy resilience. However, this policy can only succeed if the government first addresses fundamental problems in the upstream palm oil industry sector.

Director of the Centre for the Study and Advocacy of Natural Resource Law (Pustaka Alam), Zainal Arifin, stressed that the B50 programme cannot be viewed merely as an energy policy, but as a cross-sectoral agenda. This is because it concerns investment stability, palm oil productivity, and legal certainty for business actors.

“B50 is a strategic agenda for energy resilience. But this policy must be aligned across ministries and institutions. Do not let the energy sector push B50, while other policies create uncertainty for the palm oil industry,” Zainal said in a press release in Jakarta on Tuesday (12/5/2026).

The Ministry of Agriculture (Kementan) records that Indonesia’s palm oil area reaches 16.83 million hectares. Meanwhile, based on Pustaka Alam’s records, the palm oil area has reached 18 million hectares. But the issue is not just the plantation area, but productivity.

According to Zainal, many smallholder palm oil plantations and some company plantations have entered old age and their productivity has declined. “Moreover, based on claims by the Forest Area Control Task Force (PKH), it has reclaimed around 4 million hectares of palm oil land. As a result, CPO production in 2025 stagnated at 51.66 million tonnes,” he said.

He also emphasised that accelerating the Smallholder Palm Oil Rejuvenation Programme (PSR) is the most urgent policy. Currently, he added, the smallholder palm oil plantation area has reached around 6.8 million hectares, with at least 4.8 million hectares needing replanting.