Experts Assess Upstream Palm Oil Improvements as Crucial for B50 Biodiesel Mandate
B50 is a strategic agenda for energy security. However, this policy must be aligned across ministries and institutions. The energy sector should not push for B50 while other policies create uncertainty for the palm oil industry.
Jakarta (ANTARA) - Zainal Arifin, Director of the Centre for Legal Studies and Advocacy on Natural Resources (Pustaka Alam), assesses that improvements in the upstream sector of the palm oil industry are very important to ensure that Indonesia’s planned B50 biodiesel mandate can proceed smoothly.
“B50 is a strategic agenda for energy security. However, this policy must be aligned across ministries and institutions. The energy sector should not push for B50 while other policies create uncertainty for the palm oil industry,” Zainal said in his statement in Jakarta on Tuesday.
“B50 is a major national strategy. However, its success is highly determined by the government’s willingness to reform the upstream palm oil sector first,” he added.
Furthermore, he views the B50 programme not merely as an energy policy, but as a cross-sectoral agenda concerning investment stability, palm oil productivity, and legal certainty for business actors.
However, Zainal stated that productivity remains a key focus amid the vast area of palm oil plantations in Indonesia.
“Many smallholder palm oil gardens and some company plantations have entered old age and their productivity is declining,” he said.
He emphasised that accelerating the Smallholder Palm Oil Rejuvenation Programme (PSR) is the most urgent policy. Currently, the area of smallholder palm oil plantations reaches around 6.8 million hectares, with at least 4.8 million hectares requiring replanting.
The main obstacles to PSR, he continued, still revolve around land legality issues, forest area status, access to financing, and concerns from authorities about legal risks.
“The President needs to make resolving PSR a national priority. Without rejuvenation, it is impossible for B50 to have a strong supply foundation,” he said.
Zainal also urged the government to implement a flexible blending concept in the B50 rollout, where the biodiesel blend ratio is not treated as a rigid figure but adjusted to the CPO supply conditions, world oil prices, food needs, and the country’s fiscal capacity.
In addition to productivity, legal certainty regarding Business Use Rights (HGU) is considered a crucial factor.
“Palm oil replanting is a long-term investment with a crop cycle of up to 25 years, so business actors need certainty on land permit extensions,” Zainal said.