JAKARTA – Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia has ensured that the implementation of Biodiesel 50 percent (B50) program will not affect the supply of cooking oil at domestic market.
“There’s no such issue (of cooking oil scarcity),” Bahlil said to reporters when asked about the impact of government’s plan to upgrade its biodiesel program from the current B40 to B50 program in 2026.
According to Bahlil, the need for crude palm oil (CPO) as raw material for cooking oil and B50 can be met through several alternatives, which include intensifying oil palm plantations, clearing new land, and reducing palm oil exports by implementing a Domestic Market Obligation (DMO) policy.
The DMO is an obligation for companies, particularly in the natural resources sector, to meet domestic market demand before exporting their products.
Cooking oil and biodiesel 50 both require CPO as a raw material. The demand for CPO as a raw material for cooking oil reaches approximately 416,000 tons per month, or approximately 4.99 million tons per year. Meanwhile, the mandatory B50 program requires up to 5.3 million tons of CPO per year.
“If we apply the B50, we just need to reduce our exports to meet domestic demand and apply the DMO,” Bahlil said.
The minister guaranteed that the availability of cooking oil domestically will remain secured even if the government implements the B50 program.
Cutting CPO export
Previously, Agriculture Minister Andi Amran Sulaiman had stated that the government was considering to cut crude palm oil (CPO) exports by 5.3 million tons to support the implementation of B50 mandatory program, which is slated to begin in 2026.
According to Amran, the mandatory B50 program requires up to 5.3 million tons of CPO. He stated that Indonesia’s CPO production reaches 46 million tons per year. Of that amount, an average of 20 million tons are processed domestically, and 26 million tons are exported.
The government plans to implement a mandatory use of diesel fuel with a 50 percent blend of vegetable oil (fatty acid methyl ester (FAME), or B50 biodiesel, to stop the diesel imports starting in the second half of 2026. (*)
