Indonesia's B50 biodiesel lowers fuel imports but raises cooking oil prices: expert

Indonesia's B50 biodiesel program, which mandates a 50 percent blend of palm oil-based biofuel with fossil diesel, will help reduce dependence on imported fuel but may also exacerbate palm oil supply shortages and drive up domestic cooking oil prices, according to an Indonesian economic expert.

As the world's largest producer and exporter of palm oil, Indonesia relies on it as both a key food ingredient and a core feedstock for biodiesel.

The B50 program, which will take effect on July 1, is expected to reduce fuel imports, increase domestic value-added production from palm oil, create jobs, and lower greenhouse gas emissions, supporting Indonesia's broader push toward energy independence and renewable energy adoption.

At the beginning of 2025, Indonesia implemented the B40 program, raising the biodiesel blend ratio in diesel fuel to 40 percent. Dipo Satria Ramli, a researcher at the Center for Economic Reform Indonesia, said he believes that with such a sharp increase in the blend ratio after just over a year, the market may not yet be ready.

"Transition from B40 to B50 is definitely driven by the high oil price, right? That additional 10 percent is actually a high number. And I think that's something that the market is not ready yet. There's not an additional production ready yet for domestic consumption, right? And because of that, obviously the price has increased locally on the cooking oil and some of the other products as well," Ramli said.

Industry expects the B50 program to further increase Indonesia's annual demand for palm oil used in biodiesel production. At the same time, with the country currently in a seasonal low-production period, market concerns over future supply tightness are rising.

"But the palm oil has its own risk rate. For example, it has its weather risk, the El Nino this year, it has productivity risks and so many other different kinds of risks," Ramli said.

The expert noted that if global oil prices stay high and palm oil output growth remains limited, food processors and the catering industry could face rising cost pressures, some of which will eventually be passed on to consumers. He added that balancing energy security with food prices will be a key challenge to Indonesia's policy makers going forward.

Indonesia's B50 biodiesel lowers fuel imports but raises cooking oil prices: expert

China's advances in the low-altitude economy became manifest as its first domestically developed engine specifically for electric vertical takeoff and landing (eVTOL) aircraft rolled off the production line.

The AEE25 aviation electric engine, developed by the AECC (Aero Engine Corporation of China) Aeroengine Control System Institute, was delivered in Wuxi City, east China's Jiangsu Province, on Friday, setting a national record for torque density, meaning a lighter engine that allows the aircraft to carry more passengers or cargo.

The achievement marks a major breakthrough in key aviation electric propulsion technologies, with the engine's performance reaching internationally advanced levels.

The AEE25 converts electrical energy from onboard batteries into lift and thrust for rotor systems. The engine has achieved a torque density of 40 newton-meters per kilogram, the highest among China's publicly disclosed 200-kW-class aviation electric engines.

The engine integrates six core components -- a main motor and its controller, a cooling system motor and its controller, and a variable-pitch actuator and its controller -- into one.

"This is a highly integrated product. For aircraft manufacturers, it can start to work after being installed with the propeller and connected to power and the bus, thus simplifying the aircraft design process. In addition, the engine is designed to be safe enough, with all motors designed in duplicate, and all controllers having two channels. In the event of any single-point failure, the power output can be guaranteed," said Liu Guoping, deputy director of the AECC institute.

The AEE25 will be installed on the E20 eVTOL aircraft developed by Shanghai TCab Technology Co., Ltd (TCab Tech). The engine has also entered the airworthiness certification process alongside the aircraft program.

China's first homegrown eVTOL engine rolls off production line