Indonesia Reviews CPO Export Policy to Meet B40 Biodiesel Demand
JAKARTA, RAKYAT NEWS – The Indonesian Ministry of Trade is considering revising the export ratio of crude palm oil (CPO) to accommodate the implementation of the 40% biodiesel blend program, known as B40, which began on January 1, 2025.
The move comes as the demand for biodiesel is expected to rise significantly, requiring adjustments in domestic supply.
Trade Minister Budi Santoso stated that the government will assess the CPO needs arising from B40 implementation before deciding whether to adjust export ratios. “We will first analyze how much CPO is needed. If the ratio needs to change, we can make adjustments easily,” he said during an online press conference on Monday, January 6, 2025.
The B40 program is outlined in the Ministerial Decree of Energy and Mineral Resources (ESDM) No. 341.K/EK.01/MEM.E/2024. It mandates the use of biodiesel with a 40% palm oil content in diesel fuel, supported by funding from the Palm Oil Plantation Fund Management Agency.
Energy and Mineral Resources Minister Bahlil Lahadalia noted that the implementation of B40 would increase Indonesia’s biodiesel quota by 20% in 2025, from approximately 12.98 million kiloliters under B35 to 15.6 million kiloliters. This significant increase underscores the need for careful management of raw materials and supply chains.
Deputy Minister of Energy and Mineral Resources Yuliot Tanjung emphasized that the availability of raw materials and the efficiency of supply chains are critical for ensuring the success of the B40 program. He also acknowledged challenges, such as Indonesia’s diverse geography, which could impact biodiesel distribution and performance in different climates.
To support B40 production, state-owned energy company PT Pertamina (Persero) has prepared two main refineries: Refinery Unit III Plaju in Palembang and Refinery Unit VII Kasim in Papua. The blending of biodiesel will be carried out by Pertamina’s subsidiary, Patra Niaga.
Experts and stakeholders have provided input to the Ministry of Energy and Mineral Resources to ensure the smooth implementation of B40. These include addressing technical challenges related to extreme temperatures in areas such as Dumai and high-altitude regions, which could affect biodiesel performance.
The B40 program is part of Indonesia’s broader strategy to reduce fossil fuel imports, promote renewable energy, and support the domestic palm oil industry. However, its success depends on overcoming logistical hurdles and ensuring a stable supply of CPO to meet growing demand. (Uki Ruknuddin)
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