Indonesia considers regulating crude palm oil exports to meet B50 demand
Indonesia's government may regulate exports of crude palm oil to ensure there is enough domestic supply to produce biodiesel, its energy minister said on Tuesday.
The world's biggest producer of palm oil has implemented a biofuel program blending palm oil-based fuel with diesel for more than a decade to reduce reliance on fuel imports. The current mandate is to mix 40% palm oil with diesel, known as B40.
Jakarta's plan to raise this to B50 in the second half of 2026 has raised concerns that it could reduce global edible oil supplies as Indonesia would have less to ship overseas.
Acknowledging B50 would increase domestic demand for crude palm oil, Energy Minister Bahlil Lahadalia said the government is considering measures to increase palm oil production to meet rising demand, or to reduce exports.
"Cutting exports is an option, one of our options," Bahlil told reporters. "I repeat, it is an option to regulate between domestic and foreign demand and one of our instruments is DMO."
Indonesia has a rule called the Domestic Market Obligation (DMO) linking a palm oil company's export permit with mandatory sales of cooking oil to the local market.
Another option under consideration to raise output is opening up new palm oil plantations, Bahlil said, adding no decision has been finalized.
The government completed laboratory tests on the B50 mix in August and is set to carry out road tests next.
Adopting B50 would require 20.1 million kiloliters (kl) of palm oil-based biofuel a year for mixing with regular petroleum diesel, compared to 15.6 million kl with B40, energy ministry data showed.
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