Indonesia’s president-elect, Prabowo Subianto, plans to enforce a mandatory 50% palm oil-based biodiesel blend by early next year, which he predicts will cut fuel imports by $20 billion annually, reported Reuters.
Last week, Indonesia announced its intention to increase the biodiesel blending rate to 40% in January 2025, up from the current 35%, in an effort to reduce fuel imports and decrease fossil fuel emissions.
Prabowo will assume office in October, succeeding Joko Widodo, whose administration has instructed the palm oil industry to prepare for B50, a 50% biodiesel blend. Preparations and testing for this higher blend are already underway.
“We are currently at B35 and will transition to B40 and then B50,” Prabowo stated late on Saturday.
“With B50, which is 50% biodiesel made from palm oil, reaching this blend by the end of this year or early next year will save us $20 billion annually, which we would otherwise spend overseas.”
Following this announcement, Malaysia’s benchmark palm oil futures surged to their highest level in over a month before retreating to settle at 3,921 ringgit ($902.42) per metric ton, reflecting a 1.4% gain.
The Indonesian Palm Oil Producers Association (GAPKI) indicated that B50 may not be feasible for early 2025 due to the lack of testing, as stated by GAPKI’s chairman on Monday.
The Indonesian Biofuel Producers Association (APROBI) mentioned that producers would need time to test B50 fuel and expand their production capacity to meet the anticipated demand, according to the group’s secretary general.
Tatang Hernas Soerawidjaja, a biofuel expert at Bandung Institute of Technology, suggested that the biodiesel industry might need to enhance the quality of its products to ensure stability for higher mandatory blending.
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