East Kalimantan Optimistic B50 Implementation Will Boost Smallholder Palm Oil Absorption

The East Kalimantan Provincial Government is optimistic that the implementation of 50 percent palm oil blend biodiesel (B50), officially taking effect on 1 July 2026, will provide a fresh boost to the region’s plantation sector. “This national policy is projected to significantly increase the volume of smallholder palm oil produce absorbed in the East Kalimantan region,” said Ahmad Muzakkir, Acting Head of the East Kalimantan Plantation Office, in Samarinda on Friday. According to Muzakkir, this strategic policy has the potential to create a substantial positive multiplier effect. Beyond securing the domestic market, this downstream processing is key to maintaining the price stability of Fresh Fruit Bunches (FFB) directly at the level of independent smallholders. Muzakkir explained that East Kalimantan possesses a very strong production base to support this national energy security initiative. Currently, the expanse of smallholder oil palm plantations in Bumi Etam has reached 225,000 hectares. From this area, productivity is capable of generating approximately 741,000 tonnes of FFB per year. “This large upstream potential will be further optimised because it is supported by downstream readiness. There are currently 108 Palm Oil Mills (PKS) actively operating across the East Kalimantan region,” said Muzakkir. These hundreds of mills are ready to process FFB into Crude Palm Oil (CPO), which will subsequently be supplied as the primary feedstock for B50 biodiesel production. “Ultimately, this policy will have a tangible positive impact on farmers’ welfare through the increased utilisation of their harvests,” he added. Although the regulation is in place, the East Kalimantan Provincial Government stressed that the full success of B50 implementation on the ground still depends on the technical execution stages and the reliability of the distribution mechanism. This supply system is currently being finalised by the central government together with a consortium of private entities. “We are still awaiting the details of the subsequent implementation stages. For the advanced processing to the commercial distribution mechanism, everything must naturally refer to the integrated system that has been built,” Muzakkir clarified. He added that the East Kalimantan Provincial Government is in a position of readiness to provide regulatory support and regional guidance according to its authority. The success of this programme is deemed to require solid synergy between the government as the regulator and the private sector as the field operator. Furthermore, the East Kalimantan Provincial Government is committed to ensuring that the economic wheels of smallholder farmers are not crushed by this new regulatory transition. The aspect of FFB price protection at the farm level remains a top monitoring priority for the relevant agency. The provincial government continues to set periodic reference prices for FFB transparently so that farmers obtain a fair profit margin. Currently, the price of FFB in East Kalimantan is on a positive trend, hovering around Rp3,400 per kilogram. The government hopes this figure will not only hold steady but also climb sustainably as demand for CPO feedstock surges to support the B50 programme.