The Ministry of Agriculture is advancing the biofuel industry to boost domestic biodiesel supply, aligning with President-elect Prabowo Subianto’s program to achieve a 50 percent blend of biofuel in total fuel consumption.
“We are preparing companies now to achieve B50,” stated Minister of Agriculture Andi Amran Sulaiman on July 19, 2024, emphasizing readiness and the importance of key industry players in reaching this target.
However, specific details about the location of the industrial facilities supporting this initiative have not been disclosed by the ministry.
The B50 program aims to reduce reliance on imported fossil fuels by substituting them with biodiesel derived from crude palm oil (CPO). Indonesia currently produces 46 million tons of biofuel annually, exporting 26 million tons while still importing 5.3 million tons of fossil fuels each year.
“If we convert our biofuel exports and subtract our fossil fuel imports, it underscores our potential impact. As global CPO prices rise, Indonesian palm oil farmers stand to benefit,” Amran explained.
Amran expressed optimism that B50 implementation would enhance CPO prices globally, benefiting local palm oil farmers in Indonesia, one of the world’s largest CPO producers with a market share of 58-60 percent.
The agriculture ministry underscores Indonesia’s potential to become the leading global CPO supplier, emphasizing secure CPO supply chains.
However, concerns about the sustainability of the biodiesel program remain, particularly in managing upstream palm oil sector issues. Rapolo Hutabarat from the Biofuel Producer Association of Indonesia (APROBI) highlighted the critical need to address upstream challenges, such as raw material availability, to ensure the program’s sustainability.
“Upstream issues must be resolved as they directly impact raw material availability,” Rapolo emphasized, noting the importance of ongoing biofuel blending programs like B40, with prospects for further enhancements to B45 and B50 contingent on resolving these challenges.
APROBI urges the government to tackle upstream sector issues to realize Indonesia’s ambitious palm oil goals, including reaching a CPO production target of 100 million tons by 2045.
Rino Afrino from the Indonesian Oil Palm Farmers Association (APKASINDO) echoed the need to boost productivity in the upstream sector, citing challenges like land legality and progress gaps in the oil palm rejuvenation program (PSR), which has achieved less than 10 percent of its targeted hectares.
