Indonesia has officially launched its ambitious B50 biodiesel plan, raising the blend ratio of palm oil-based biofuel to 50 percent in diesel, a move aimed at boosting national energy self-sufficiency and cutting reliance on imported fuel.
On Thursday, President Prabowo Subianto inaugurated the B50 biodiesel policy in Karawang, West Java, making Indonesia the first country globally to fully implement the standard. While many drivers at filling stations voiced support for the plan, concerns remain over potential diesel price hikes.
"It's half plant-based, half petroleum; I think that's great. It's greener. But the most important thing is diesel prices shouldn't rise any further," said Sofian, fellow truck driver.
Indonesia is the world's largest palm oil producer, and since adopting fuel blending policies in 2008 has rolled out B2.5, B30, and B40 standards. Data from the Ministry of Energy and Mineral Resources suggests palm oil consumption for biodiesel will rise from 15.2 million tons last year to 16.3-17 million tons under B50.
Experts warned the move will drive palm oil prices higher, even beyond Indonesia.
"But I think with this B50, the demand (for palm oil) is just really high, and that increases from 40 percent to 50 percent. In addition, I think with the El Nino coming up, so the heat. Every time there's an El Nino in Indonesia, often the risk of forest fire increases. So that would affect the supply as well. So definitely the prices will go up here, I think internationally, for palm oil," said Dipo Satria Ramli, researcher at Indonesia's Center of Reform on Economics.
Besides higher prices, experts said the B50 rollout brings greater challenges across the supply chain. Noting gaps remain in methanol supply, fuel storage, logistics, and infrastructure in Indonesia, experts said that ongoing investment will be crucial to ensure the plan's continued success.
Indonesia launches world’s first B50 biodiesel plan
