Regulations
Producers say this year's additional demand is manageable, but stagnant yields, lower exports and shrinking biodiesel funds could challenge the mandate.
Indonesian President Prabowo Subianto gestures during a ceremony marking the start of the B50 biodiesel program which involves biodiesel containing 50 percent diesel made from palm oil, on July .9 in Karawang, West Java. (Reuters/Ajeng Dinar Ulfiana)
Industry players say they can supply the additional crude palm oil (CPO) needed this year under the government’s latest biodiesel mandate but warn sustaining the policy will require significantly higher production in the years ahead.The mandatory increase in palm-based biodiesel to a 50 percent blend from 40 percent, which took effect on July 1, is expected to lift domestic CPO consumption for biodiesel to between 16.3 million and 17 million tonnes annually.
Producers expect national CPO output of around 53 million tonnes in 2026, which should leave enough supply to fulfill the higher domestic demand for fuel.
