BPDP ensures compensation funds for B50 programme remain secure until year-end

The Palm Oil Fund Management Agency (BPDPKS) has stated that compensation funds to support the 50 per cent palm oil-based biodiesel (B50) mandate are secure until the end of 2026.

“For this year, the funds remain secure,” said Mohammad Alfansyah, Director of Downstream Sector Fund Distribution at BPDPKS, during an interview at the BPDPKS Jakarta office on Tuesday.

BPDPKS supports the B50 programme by managing palm oil plantation funds to ensure energy remains affordable while promoting sustainability. The funds managed by BPDPKS are sourced from export levies on palm oil products and their derivatives. These funds are subsequently used to cover the price difference between the biodiesel market index price and the market index price of solar diesel.

Regarding compensation for the biodiesel programme in 2027, Alfansyah noted that studies are ongoing regarding the compensation funds for the biodiesel mandate. This is particularly relevant as, in 2027, palm oil exports will be conducted through PT Danantara Sumber Daya Indonesia (DSI).

“We review the issue of biodiesel compensation every year. Whether DSI exists or not, the biodiesel compensation will certainly be available,” Alfansyah added.

In addition to compensation funds, BPDPKS also supports the development of biofuel infrastructure, including the construction and capacity enhancement of biodiesel production facilities, as well as the development of more efficient biofuel distribution and logistics chains.

Indonesia is scheduled to implement the B50 mandate starting 1 July 2026. The Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that this policy could save energy subsidies by as much as Rp48 trillion. He also noted that Pertamina is prepared to implement the policy, which has the potential to reduce fossil fuel usage by 4 million kilolitres (KL) per year.