CORE: B50 Implementation Must Account for CPO Export Opportunity Costs

Economist Yusuf Rendy Manilet from the Center of Reform on Economics (CORE) has stated that the implementation of the mandatory B50 biodiesel programme must consider the opportunity costs arising from reduced crude palm oil (CPO) exports. He argued that an evaluation of B50 needs to be conducted more comprehensively by considering factors beyond just savings on diesel imports to ensure the programme’s economic benefits are accurately measured. The government previously estimated that implementing B50 could save foreign exchange from reduced diesel imports by approximately Rp 157.28 trillion in 2026. Meanwhile, the incentive requirements for biodiesel managed by the Palm Oil Plantation Fund Management Agency (BPDPKS) are projected to reach around Rp 32 trillion. Based on these calculations, the economic benefits of the programme are considered greater than the direct costs incurred. However, Yusuf assessed that this calculation does not yet fully reflect the overall economic costs. According to him, import savings should be calculated alongside the potential reduction in foreign exchange earnings, as a portion of CPO production is diverted from the export market to the domestic market to meet biodiesel needs. “The measure of the programme’s success is not sufficient by merely comparing import savings with the amount of subsidy; it must also include the opportunity cost of sacrificed exports,” he said on Sunday (5/7/2026). Furthermore, the fiscal success of the B50 programme is considered to be heavily influenced by global commodity price movements, particularly the price differential between CPO and petroleum-based diesel.