Indonesia's Palm Oil Strategy: Boosting Biodiesel Amid Export Decline

Indonesia anticipates a decline in palm oil exports by 7.3% in 2025, despite an increase in production, due to rising biodiesel output. The B40 biodiesel program is driving this trend, with higher palm oil demand tightening supplies and raising prices. Export levies help fund the program, ensuring implementation without additional levy revisions.

Indonesia is preparing for a 7.3% decrease in palm oil exports in 2025, despite increased production figures, as the nation enhances its biodiesel output, according to Fadhil Hasan of the Indonesian Palm Oil Association.

The B40 biodiesel program, which mixes 40% palm oil fuel, aims to reduce Indonesia's dependency on imported diesel. Although it faced initial delays, full implementation is expected soon.

The surge in palm oil usage for biodiesel is tightening supplies and driving prices up, while an export levy helps fund the program. The government plans substantial subsidies without the need for increased levies.