B50 Requires Large Supply, People's Palm Rejuvenation Needs to be Accelerated

The Indonesian Palm Oil Farmers’ Union (SPKS) assesses that strengthening the upstream sector is key to maintaining the sustainability of the palm oil industry amid the push for B50 biodiesel downstreamisation. The acceleration of the People’s Palm Rejuvenation (PSR) programme needs to be expedited to keep the supply of raw materials stable. This step is deemed important so that energy policies run in balance with improvements in farmers’ welfare. SPKS Chairman Sabarudin stated that the PSR programme plays a strategic role in increasing the productivity of people’s palm oil while supporting the national energy raw material needs. “So far, the realisation of PSR is still far from the target. Yet this programme is very important for boosting farmers’ productivity and supporting future biodiesel raw material needs,” said Sabarudin on Friday (24/4/2026). SPKS notes that PSR realisation remains below 50% each year, even though the programme has been running since 2015 with a target of around 180,000 hectares per year. According to Sabarudin, accelerating PSR can be a solution without needing to open new land, while also driving productivity in people’s plantations. With rejuvenation, palm oil productivity is assessed to be able to increase from around 10 tonnes to 20 tonnes of fresh fruit bunches (FFB) per hectare per year or more. “The productivity potential can even reach 20 to 30 tonnes of FFB per hectare per year if supported by good cultivation practices,” said Sabarudin. He stated that this productivity increase will strengthen the CPO supply for the B50 biodiesel programme to be implemented starting July 2026. Nevertheless, SPKS assesses that there are still several challenges in the field, from land legality to financing needs during the replanting period. Farmers are said to lose income while the plants are not yet productive. “During the replanting period, farmers lose income. Therefore, the financing scheme must include living costs, not just planting costs,” said Sabarudin. SPKS proposes increasing PSR assistance from Rp60 million to Rp90 million per hectare to cover technical needs and farmers’ economic continuity. In addition, SPKS also encourages evaluation of the biodiesel subsidy scheme so as not to impact FFB prices at the farmer level. “Don’t let downstreamisation policies burden farmers through FFB price drops due to export levy schemes,” said Sabarudin. SPKS assesses that the success of palm oil downstreamisation, including the B50 programme, is highly dependent on strengthening the upstream sector, given that around 40% of the national palm oil plantations are managed by smallholders.