Govt to reassess B50 biodiesel mandate amid supply, funding concerns

Detailed summary

The higher blend has raised concern among palm oil industry players that increased domestic consumption could squeeze feedstock supplies and weigh on exports.

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The higher blend has raised concern among palm oil industry players that increased domestic consumption could squeeze feedstock supplies and weigh on exports.

he government is weighing whether to maintain its latest biodiesel blending mandate next year, which requires a fuel mix of 50 percent palm-based diesel and ​conventional diesel known as B50, amid concerns over supply constraints and financing pressures.

Officials will hold a meeting next week to review the mandate, including technical readiness, feedstock availability and potential financial risks, according to Eniya Listiani Dewi, director general of new and renewable energy at the Energy and Mineral Resources Ministry.

“Next year’s implementation must also take into account technical readiness, sufficient feedstock supplies and measures to mitigate financial risks,” she said on Thursday at the Indonesian Palm Oil Conference (IPOC), as quoted by Kontan.

The government introduced the B50 mandate on July 1, raising the required share of palm-based biodiesel in diesel fuel to 50 percent from 40 percent. Distributors were given a three-month transition period to clear remaining B40 stocks, while producers were instructed to supply higher-quality palm methyl ester (PME) for the new blend.

The higher blend has raised concerns among palm oil industry players that increased domestic consumption could squeeze feedstock supplies and weigh on exports.

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Preliminary government assessments, however, indicate that palm oil supplies remain sufficient to meet biodiesel demand through 2027, allowing exports to continue, Eniya said.

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