B50 Programme Brightens Prospects for Palm Oil Downstreaming, Says Indef

Executive Director of the Institute for Development of Economics and Finance (Indef) Esther Sri Astuti assessed that the B50 programme gives the domestic palm oil commodity bright prospects for downstreaming into other derivative products with high added value. She noted that palm oil can not only be utilised as an energy raw material but can also be developed for other sectors such as pharmaceuticals and food. “In my opinion, the prospects for palm oil are very bright, especially since there are more than 200 types of palm oil derivatives. It can not only be processed into energy but also pharmaceuticals, food, and others,” Esther said when contacted in Jakarta on Friday. She assessed that Indonesia has a great opportunity to strengthen palm oil downstreaming by developing various derivative products. However, this step must be accompanied by the development of a strong industrial ecosystem in order to increase competitiveness in the global market. “Indonesia has a great opportunity to continue downstreaming palm oil into various derivative products. But the most important thing is to build the ecosystem,” she said. Esther explained that the export development strategy for palm oil derivative products needs to be directed towards product differentiation. Indonesia cannot simply rely on exporting crude palm oil (CPO), but must increase the production of value-added goods such as soap, detergent, biodiesel, and lubricants. In addition to strengthening downstreaming, Esther encouraged industry players to pay attention to quality standards and international trade regulations. Palm oil derivative products, especially those entering the food and cosmetics sectors, must meet the safety and sustainability standards applicable in destination markets. Previously, the Ministry of Energy and Mineral Resources (ESDM) stated that the implementation of B50 biodiesel provides real economic benefits for the country while strengthening national energy independence. ESDM Ministry spokesperson Dwi Anggia explained in Jakarta on Friday that this transformation marks an era where national energy sovereignty is driven directly by domestic commodities. Under this new formula, for every litre of diesel consumed by the public, half of its portion now comes from produce planted and produced directly by local Indonesian farmers. According to him, this full involvement of domestic commodities is believed to strengthen the fundamentals of national energy security in facing global market turmoil. “This B50 programme provides real economic benefits for the country. The implementation of B50 is projected to save the country’s foreign exchange by around Rp170 trillion throughout 2026. These savings are important capital to support development and strengthen the national economy. In addition, this programme is targeted to create up to 2.1 million new jobs for the community,” he stated.