Indonesia is preparing to raise its palm oil export levy as the government looks to secure additional funding for its expanding biodiesel programme, according to Energy Ministry official Eniya Listiani Dewi, reported Reuters.
As per the media report, the country, which is the world’s top producer of palm oil, currently enforces a 40% biodiesel blending requirement, known as B40, making it the highest mandatory blend globally. Authorities are aiming to lift that requirement to 50% later this year.
Indonesia finances its biodiesel subsidies through export levies imposed on palm oil products. At present, the levy on crude palm oil is fixed at 10% of the government’s monthly reference price, while charges on processed palm oil products range from 4.75% to 9.5%.
Speaking to reporters, Eniya said studies conducted by the coordinating ministry for economic affairs indicate that levy rates will need to be increased regardless of whether the country maintains B40 or moves to B50. She noted that funds held by the national plantation fund agency, which supports the biodiesel scheme, are steadily declining, the news report further added.
Government officials are scheduled to meet next week to discuss adjustments to the levy, she added.
Data released by the energy ministry showed Indonesia consumed 14.2 million kilolitres of palm-based biodiesel in 2025, marking a 7.6% rise from the previous year. For the current year, authorities have set a biodiesel allocation of 15.65 million kilolitres to meet blending requirements.
Meanwhile, a road trial for the B50 blend began in December. The testing phase, which typically lasts about six months, is a key step before the higher blending mandate can be rolled out nationwide.
