JAKARTA – The Indonesian government has planned to develop a biodiesel plant in Merauke, South Papua. The production of biodiesel in the plant will be based on the mixture of fossil diesel fuel and fatty acid methyl ester (FAME) processed from crude palm oil (CPO).
Deputy Minister of Energy and Mineral Resources (ESDM), Yuliot Tanjung said that the biodiesel plant is targeted to be completed within two years and will start production in 2027. The acceleration of the plant development is aimed to fulfil the domestic energy need.
“We’re accelerating the development, especially in Merauke, South Papua. We hope in 2027 it will start production of biodiesel,” Yuliot said at the office building of KESDM on Monday (11/8/2025).
According to Yuliot, the government is now consolidating to support the acceleration of the project development. But he did not elaborate about the investment for the project development and the production capacity of the biodiesel plant.
He also said that the government is also conducting an evaluation of the plan to implement the biodiesel 50 percent (B50), which is an upgrading of B40 mandatory program that has been started since early this year.
“We’re evaluating the implementation of B40 program and the plan to upgrade it to B50 program next year,” said Yuliot.
This year the government had determined the allocation of B40 program at a total of 15.6 million kiloliters, consisting of 7.55 million kiloliters for Public Service Obligation (PSO), and 8.07 million kiloliters for non-PSO.
The implementation of B40 mandatory program is stipulated by the ESDM Minister Decree No:341.K/EK.01/ MEM.E/2024 on the use of bioenergy from the mixture of biodiesel based on FAME from palm oil and fossil diesel fuels, which is 40% funded by the Oil Palm Plantation Fund Management Board (BPDPKS).
The distribution of the biodiesel is supported by 24 biodiesel producing companies, two (2) oil-gas companies that distribute B40 under the PSO and non-PSO schemes, and 26 oil-gas companies specializing in the distribution of B40 for non-PSO. (*)
