JAKARTA – The Indonesian Palm Oil Association (GAPKI) has projected that Indonesia’s export of crude palm oil (CPO) this year is potential to decrease up to 1.5 million tons. The decrease is seen potential to hinder the government’s plan to implement the mandatory program of biodiesel 50 percent (B50) in 2026.
GAPKI Chairman Eddy Martono said that the funding of B50 program has been until now derived from export levy (PE) of CPO. With the tendency of palm oil production to stagnate, Eddy asked the government to review its policy on the implementation of B50 program, as an upgrading of the current program of B40.
“I think under the current condition of palm oil production, the government will find it hard to implement the B50 program, considering that the production tends to stagnate and exports will tend to decrease. But in the meantime, the B50 program will be financed with the fund collected from the export levy of palm oil,” Eddy said on Tuesday (12/08/2025).
Based on data from GAPKI, Indonesia’s production of CPO in 2024 reached 52 million tons, with domestic consumption reaching 23.8 million tons or 45.2% from total production. This year the production is projected to increase slightly to 53.6 million tons, but palm oil exports are expected to decrease to 27.5 million tons in 2025.
The decline of palm oil exports will automatically affect the amount of export levy, which has been the main source of funding for the subsidy of the government’s biodiesel mandatory program.
Meanwhile, Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia said that they are now drafting a new regulation to make the price of B40, a mixture of 40% biodiesel and 60% fossil diesel fuel, more affordable for industrial players.
“We’re seeking a formulation that will make the price of B40 more competitive and more affordable for industries,” Bahlil said during a press conference on his ministry’s performance during the first semester 2025 at the office building of KESDM in Jakarta on Monday (11/08/2025).
Bahlil said based on prevailing regulations, the biodiesel comprises of two categories, namely the one under public service obligation (PSO) and the other under non-PSO. “Later, the industrial sectors will use B40 under the non-PSO with more competitive price in the market. (*)
