JAKARTA – The implementation of mandatory program of biodiesel 50 percent (B50), which is planned to begin in July 2026, is projected to significantly increase the demand for crude palm oil (CPO). But the increase is considered as both a challenge and an opportunity for the national palm oil industry.
The Indonesian Palm Oil Association (GAPKI) projected that the additional CPO demand for the B50 program will reach around 3 to 3.5 million tons per year when it is fully operational.
GAPKI Chairman Eddy Martono explained that the increase in the domestic consumption of palm oil will be realized gradually since the beginning of B50 program implementation.
In the early stages of this year, the additional demand is estimated to reach in the range of 1.5–1.7 million tons, before gradually increasing over the full year of B50 implementation.
Supply secured, but risks remain
In terms of production, the Indonesian palm oil industry is considered to have the capacity to meet the rising domestic demand. However, the situation could change if global market of vegetable oils will also see surging demand.
Eddy Martono warned that the current production stagnation could potentially become an obstacle if exports increase significantly.
Nevertheless, he emphasized that fulfilling domestic demand will remain a top priority over the export market.
Productivity determines continuation of B50
Actually, looking forward the success of the B50 program depends heavily on increasing the productivity of oil palm plantations. “Without the increase of productivity, it will be difficult to maintain the sustainability of the national bioenergy program,” said Eddy.
According to him, increasing production is no longer just an option but an urgent necessity if Indonesia wants to maintain and even expand its biodiesel program in the future.
Big Potential, hindered by PSR
Indonesia’s potential CPO production could actually reach up to 60 million tons per year. However, its realization has been hampered by the slow implementation of the replanting program for smallholders’ plantations (PSR).
So far, production growth has been driven more by weather factors and the onset of fruiting of rejuvenated palm trees on companies’ plantations, rather than by the acceleration of PSR.
Acceleration of Replanting
Given the trend of growing demand, GAPKI considers that it is now crucial for Indonesia to accelerate the implementation of PSR for smallholders. Various obstacles in the field need to be resolved immediately to facilitate and accelerate the PSR implementation as the key factor in increasing palm oil production.
That way, Indonesia will not only be able to meet domestic needs but also remain competitive in fulfilling the growing demand at the global market of vegetable oils. (*)
Beritasatu.com | riauaktual.com. GAPKI: Implementasi B50 Butuh Tambahan 3,5 Juta Ton CPO, Produksi Nasional Diminta Digenjot. https://www.beritasatu.com/network/riauaktual/835736/gapki-implementasi-b50-butuh-tambahan-35-juta-ton-cpo-produksi-nasional-diminta-digenjot/
