Indonesia's mandatory biodiesel policy has reduced reliance on fuel imports, particularly diesel. Experts assess it could save up to 8-10 billion US dollars in foreign exchange annually. Development from B1 to B50 is targeted for completion by July 2026.
Jakarta -- Indonesia's government has implemented a mandatory biodiesel policy, backed by abundant palm oil feedstock and processing technology. Rhenald Kasali, Professor at the University of Indonesia's Faculty of Economics and Business, states the program effectively curbs diesel imports and improves the energy trade balance.
"The biodiesel program is indeed effective in suppressing diesel imports and improving the energy trade balance through significant reductions in diesel imports. The program could save up to 8-10 billion US dollars in foreign exchange per year," Rhenald said in Jakarta on Tuesday (14/4/2026).
Tungkot Sipayung, Executive Director of the Palm Oil Agribusiness Strategic Policy Institute, details that B40 implementation cut diesel imports from 8.3 million kiloliters in 2024 to 5 million kiloliters in 2025, a reduction of 3.3 million kiloliters. In 2025, the policy saved Rp 130.21 trillion in foreign exchange, reduced emissions by 38.88 million tons of CO2 equivalent, and added Rp 20.43 trillion in value from CPO to biodiesel.
Rhenald stresses the need for good palm oil governance to prevent deforestation, protect the environment, and respect indigenous rights. He also warns of potential trade-offs between energy and food, where allocating CPO to biodiesel could cause cooking oil shortages.
