Eddy Martono, chair of the Indonesian Palm Oil Producers Association (GAPKI), has stated that the implementation of the B50 biodiesel blend will decrease the volume of crude palm oil (CPO) exports, potentially leading to reduced foreign exchange earnings for the country.
B50 refers to a fuel mixture containing equal parts diesel and biofuel (BBN), each making up 50 percent. GAPKI estimates that if B50 is adopted—assuming no changes in the current palm oil situation—exports could drop by 6 million tons, which is three times the projected decline of 2 million tons under the B40 blend.
“With B40, if implemented, our exports will decrease by 2 million tons. If we are compelled to use B50, exports could fall by 6 million tons from an average of 30 million tons,” he stated during a press conference at the GAPKI office in Central Jakarta on Tuesday, October 22.
Eddy warned that a reduced supply of Indonesian palm oil in the global market could lead to increased vegetable oil prices worldwide, causing palm oil product prices to soar and potentially triggering inflation in Indonesia.
According to GAPKI, CPO production in August 2024 was 3.98 million tons, a 10.2 percent increase from 3.61 million tons in July. Meanwhile, palm kernel oil (PKO) production rose to 391,000 tons, up from 344,000 tons in the previous month.
Despite his concerns, Eddy expressed confidence that the government, under President Prabowo Subianto, would not rush into implementing the B50 program. “I firmly believe the government will not act recklessly with B50, especially with current production levels being stagnant,” he said.
Eddy also viewed the plans for developing B35 and B40 blends positively, noting that they could provide the government with an opportunity to enhance the domestic People’s Oil Palm Rejuvenation (PSR) program, which is currently lagging behind that of neighboring countries.
GAPKI’s latest data shows that palm oil stocks at the end of August were 2.45 million tons, down from 2.51 million tons at the end of July. This decrease was attributed to a 10.2 percent rise in production, a 1.47 percent increase in domestic consumption, and a 6.35 percent uptick in exports.
