Indonesia to Implement Biodiesel B50, Palm-Oil Producers Respond

Jakarta, CNBC Indonesia – The Indonesian Palm Oil Producers Association (Gapki) has said that a 50% biodiesel blend with diesel could widen subsidies from the Plantation Fund Management Agency (BPDP). Gapki executive director Mukti Sardjono said that if the price gap between biodiesel and diesel widens, the subsidy will widen as well.

‘Clearly, having BPDP would be beneficial, but as the spread between biodiesel and diesel grows, the subsidy will grow accordingly,’ he said at the Energy Forum B50 CNBC Indonesia, quoted on Friday (6 March 2026).

One solution to the ballooning subsidy is for the government to raise levies/PE to cover biodiesel subsidy needs. ‘The government, whether it likes it or not, now must raise PE; that is indeed to meet the subsidy needs. This is a dilemma, not a no-win, but a dilemma we must face,’ he added.

Additionally, he assessed that if B50 is implemented then domestic biodiesel production must be increased. This is because if production does not rise, the share of CPO exports could fall and affect other sectors.

‘Whether we like it or not going forward, for example, if we intend to maintain B50, production must be increased; if production isn’t increased, the export casualties could be greater and could fall,’ he concluded.