Antara News·Indonesia·Friday, November 13, 2026 at 08:01 AM UTC

Government studies raw material sufficiency for B50 in 2027

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Fauzul Azhim Bin Fakhrurazi

Nusa Dua, Bali (ANTARA) - The government is still evaluating the 50 percent biodiesel mandate (B50) for 2027 to ensure that the policy does not disrupt the sustainability of the industry.

Director General of New and Renewable Energy and Energy Conservation (EBTKE) at the Ministry of Energy and Mineral Resources (ESDM) Eniya Listiani Dewi said on Friday that her side will hold a meeting on the 2027 biodiesel mandate next week.

The meeting will specifically discuss a comprehensive evaluation and the finalization of projections for green energy policy in 2027.

“Next year’s implementation must also consider technical readiness, the adequacy of raw material supply, and the mitigation of financial aspects,” she said while speaking at the 22nd Indonesian Sustainable Palm Oil 2026 and 2027 Price Outlook (IPOC) in Nusa Dua, Bali.

She said there are concerns that B50 will reduce feedstock in the industry, but her side has ensured that raw material supply is sufficient to meet the needs of the mandatory program through next year, so industry players can still export normally.

However, she added, her side continues to evaluate all existing risks and wants to be more careful in determining the biodiesel content for next year.

According to Eniya, as of November 2026, domestic biodiesel distribution has reached 13.84 million kiloliters, or around 83 percent of the total allocation of 16.75 million kiloliters.

She stressed that every increase in the biodiesel mandate, from B35 and B40 to B50, has always been based on mature, comprehensive studies.

“Experience from previous policy transitions is an important reference so that energy policy does not disrupt food supply or export stability,” she said.

According to Eniya, B50 is prepared to strengthen national energy security while reducing dependence on fossil fuel imports. The use of FAME (fatty acid methyl ester) can help ease the government’s subsidy burden when global energy prices fluctuate.

The government is also monitoring the availability of raw materials and efforts to raise plantation productivity through the Smallholder Oil Palm Replanting (PSR) program.

She added that the implementation of B50 is designed as a strategic response to strengthen national energy security while curbing dependence on fossil fuel imports.

Even amid fluctuations in global energy prices, the presence of FAME has proven to be a buffer that helps ease the government’s subsidy burden on petroleum, she said.

Nevertheless, she added, the government continues to monitor the challenge of raising upstream productivity through the PSR program and future feedstock availability.

She also stressed that, currently, incentives are given specifically for public service obligation (PSO) use, while demand for biodiesel in the non-PSO sector is also increasing.

Meanwhile, UPN Veteran Jakarta economist Achmad Nur Hidayat explained that the results of a quantitative simulation for 2027-2030 show that implementing a rigidly fixed B50 blend (fixed mandate) can reduce diesel imports by up to 46.82 million kiloliters.

However, he continued, the policy triggers two main trade-offs: a shrinking volume of crude palm oil (CPO) exports because supply is drawn into the domestic market, and a swelling burden of price-gap incentives for biodiesel (PSO).

“If it is fixed rigidly without an adjustment mechanism, the simulation shows palm oil export volume could be held at around 26.16 million tons in 2030, while BPDP export levy funds would no longer be sufficient to cover the incentive burden, which risks triggering a funding deficit,” he said.

He proposed an adaptive policy option equipped with fiscal and supply safeguards so that the blend level can be adjusted dynamically in line with market price fluctuations, allowing biodiesel distribution to be more optimal and not burden the state.

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