Expert: Indonesia Could Pioneer High-Blend Biodiesel Adoption

Economist Hendry Cahyono from Surabaya State University (Unesa) believes Indonesia has the opportunity to become a pioneer in the application of high-blend biodiesel ahead of the B50 implementation in July 2026. “Indonesia has the opportunity to become a pioneer in the application of high-blend biodiesel,” Hendry said in a statement received in Jakarta on Friday. He noted that several other countries still apply lower biodiesel blends, such as Malaysia at around B10–B20, Thailand at about B20, and a number of European countries using blends of around 7–10 percent. Hendry added that the use of B50 could reduce energy import figures. The reduced need for diesel imports could also positively impact the trade balance and the rupiah exchange rate. “If that is achieved, it will reduce import figures. The reduced need for diesel imports could also have a positive impact on the trade balance and the rupiah exchange rate,” he said. The government estimates that implementing B50 could allow Indonesia to stop diesel imports and save up to Rp157 trillion in foreign exchange. According to Hendry, this target is achievable provided the government has carefully calculated the raw material requirements, biodiesel industry capacity, and financing scheme. He assessed that the B50 mandate could also become a key project in achieving energy security. Although energy self-sufficiency does not solely depend on biodiesel, increasing the use of domestically sourced fuel can reduce dependence on foreign supplies. “If B50 is used and the industrial sector also adopts B50, it could become a pilot project for energy security,” he stated. Hendry further added that the implementation of B50 could spur the growth of the national biodiesel industry. The increased demand for biofuel could open new investments, boost biodiesel plant utilisation rates, and create a multiplier effect for the plantation and palm oil processing sectors. Nevertheless, he cautioned that environmental aspects must also be safeguarded from the upstream side. Hendry said the increased need for palm oil should ideally be met through improved productivity and technology, rather than massive plantation expansion that risks causing deforestation and carbon debt.