Implementation of B50 Biodiesel Requires Strengthening Upstream Palm Oil Production

The government’s plan to implement a mandatory B50 biodiesel starting from the second half of 2026 has drawn special attention from national palm oil industry players. This is due to the limited availability of raw materials up to now.

A palm oil researcher from the University of Indonesia (UI), Dr Eugenia Mardanugraha, stated that current national crude palm oil (CPO) production is not fully sufficient to meet the additional biodiesel needs at the B50 level. This occurs amid high demand from the export market and other domestic needs such as food and oleochemicals.

“This condition creates the potential for crowding out, where CPO allocation will compete between export interests and fulfilling domestic mandates,” said Eugenia in a press statement in Jakarta on Tuesday (7/4/2026).

In that situation, Eugenia said, if the B50 policy is forced to be implemented in the near future, the most likely adjustment would be a reduction in CPO export volumes. This is because the priority for meeting domestic needs, particularly for the biodiesel programme, will absorb a larger portion.