CORE: Implementation of B50 Requires Supply Consistency and Policy Certainty

Jakarta (ANTARA) - The Executive Director of the Center of Reform on Economics (CORE) Indonesia, Mohammad Faisal, believes that accelerating the implementation of B50 biodiesel requires consistency in the supply of raw materials such as crude palm oil (CPO) and policy certainty to ensure it runs optimally and sustainably. Faisal stated that the B50 programme, which aims to reduce dependence on diesel imports, needs preparation from the upstream side, particularly regarding the sustainability of supply from the palm oil industry. “From the upstream side, the important thing is to ensure a consistent supply from the palm oil industry,” Faisal told ANTARA in Jakarta on Monday. In addition, long-term policy certainty is also considered a determining factor, especially for industry players who must adjust to the use of higher-content biodiesel. According to him, the industry will make adjustments if there is certainty, both in terms of supply and policy consistency. “Because to change, of course, there are costs that must be incurred, there is investment. And this investment relies on long-term policy consistency. If that is not there, it will be difficult to encourage the industry to use biodiesel,” he said. He added that without such certainty, business actors tend to hold back investments due to the risk of policy changes midway. Faisal also emphasised the importance of strong synergies among players in the biodiesel ecosystem, from the palm oil industry as raw material suppliers, biodiesel producers, to the end-user sector. Furthermore, Pertamina’s role is deemed crucial in ensuring the optimal implementation of B50, particularly in its commitment to reducing oil and fuel imports while increasing the absorption of palm-based fuel. He explained that Pertamina’s role is important because it is the off-taker that absorbs palm-based biodiesel, mixes it with diesel, and distributes it to end consumers. Previously, the government prepared several mitigation steps to dampen the impact of global uncertainties due to the escalation of conflict in the Middle East, which is driving up world oil prices. Several options being studied include budget efficiency, flexible work arrangements (work from home/WFH), strengthening B50 policies, and national energy savings.