FAME (Fatty Acid Methyl Ester)
FAME (Fatty Acid Methyl Ester) is a compound produced from the transesterification of fatty acids in palm oil with methanol. FAME is a form of biodiesel derived from vegetable oils, including palm oil, and is used as an alternative fuel to replace or blend with fossil-based diesel.
How FAME Is Made
Transesterification is a chemical reaction process between triglycerides in vegetable oil and alcohol (generally methanol), with the aid of a catalyst, which produces fatty acid methyl ester (FAME) and glycerol as a by-product. This reaction takes place in three sequential reversible stages: the conversion of triglycerides into diglycerides, diglycerides into monoglycerides, and finally monoglycerides into glycerol in which each conversion stage produces one ester molecule, so that one triglyceride molecule can produce three ester molecules (FAME).
Homogeneous base catalysts such as KOH, NaOH, and sodium methoxide (NaOCH3) are the most widely used in the transesterification of vegetable oils into FAME, because they are cheap and easy to obtain, and show good catalytic activity with minimal reaction time and high biodiesel yield (yield) at room temperature and pressure. This transesterification process takes place under relatively mild conditions (temperature 5080C, atmospheric pressure), unlike the hydrogenation process used in making HVO, which requires far higher pressure and temperature.
FAME and Indonesia’s Biodiesel Program
As the world’s largest palm oil producer, Indonesia makes FAME the main component of its national biodiesel program, which is blended into fossil diesel fuel at various levels known by the term Bxx, where “xx” indicates the percentage by volume of FAME in the blend.
Indonesia’s biodiesel program has developed gradually since it was introduced in 20052006: from B5, rising to B10 (2013), B20 (2016), B30 (2020), and B35 (2023). The government then set B40 starting 1 January 2025, and officially enforced the B50 mandate nationally from 1 July 2026 through Minister of Energy and Mineral Resources Decree Number 257.K/EK.01/MEM.E/2026, with a three-month transition period for business actors to use up remaining B40 stocks. This policy makes Indonesia the first country in the world to implement a mandatory 50% biofuel blend nationally, covering all sectors from motor vehicles and mining heavy equipment to railways.4
The Difference Between FAME and Renewable Diesel/HVO
FAME must be distinguished from renewable diesel or HVO (Hydrotreated Vegetable Oil). The main difference lies in the oxygen content: FAME retains the ester group in its structure (still containing oxygen), whereas HVO is processed through full hydrogenation, which removes all oxygen atoms, producing pure paraffinic hydrocarbons whose properties much more closely resemble fossil diesel. It is this oxygen content that makes FAME more prone to oxidation during storage than HVO.
Relevance to the Indonesian Palm Oil Industry
The FAME-based biodiesel program is one of the largest absorbers of domestic CPO production, as well as a government strategy to reduce diesel imports and strengthen national energy security. For the palm oil industry, this opens up a large and stable domestic market, beyond the export demand for CPO for food and oleochemicals.
References
RSC Advances, “Widely used catalysts in biodiesel production: a review”, https://pubs.rsc.org/en/content/articlehtml/2020/ra/d0ra07931f
ScienceDirect Topics, “Hydrotreated Vegetable Oil – an overview”, https://www.sciencedirect.com/topics/engineering/hydrotreated-vegetable-oil
CNBC Indonesia, “B50 Biodiesel Mandate Takes Effect July 2026, with a 3-Month Transition”, https://www.cnbcindonesia.com/news/20260630160744-4-746912/mandatori-biodiesel-b50-mulai-berlaku-juli-2026-ada-transisi-3-bulan
4 Detik Finance, “From 1 July 2026, All Sectors Must Use B50!”, https://finance.detik.com/energi/d-8463401/mulai-1-juli-2026-semua-sektor-wajib-pakai-b50