Jakarta: Indonesia’s B40 biodiesel programme, designed to reduce the country’s dependence on imported diesel fuel, is expected to be fully implemented next month after initial delays, according to Eniya Listiani Dewi, an official from the energy ministry.
Speaking on Friday, Dewi revealed that the distribution of palm oil-based biodiesel has already reached approximately 1.2 million kilolitres this year, reports Reuters.
The B40 programme, which mandates a 40% palm oil blend in biodiesel, was originally scheduled to launch on January 1. However, regulatory issues caused delays, prompting the government to allow fuel distributors a transition period until the end of February. Dewi confirmed that there will be no further extensions to this deadline, stating, “I think that everybody is making efforts to meet it.”
Previously, Indonesia’s biodiesel blend contained 35% palm oil. The move to B40 is being closely monitored by palm oil market participants, as it could significantly impact demand from the energy sector and influence Indonesia’s palm oil exports.
As the world’s largest palm oil producer, Indonesia has allocated 15.6 million kilolitres of biodiesel for distribution in 2025, up from around 13 million kilolitres last year. The increased volume may require higher subsidies for palm oil diesel production. To fund this, the government plans to raise the export levy on crude palm oil from 7.5% to 10%.
Eddy Abdurrachman, CEO of the state plantation fund responsible for collecting and managing the levy, confirmed that the official decree to implement the new levy is still in progress. Despite the planned increase, the fund’s target for palm oil levy collection remains unchanged at 25 trillion rupiah for this year, matching last year’s figure.
The B40 programme is a key part of Indonesia’s strategy to boost domestic energy security, reduce fossil fuel imports, and support the palm oil industry. Its full implementation next month marks a significant step in the country’s efforts to promote renewable energy and sustainable economic growth.
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