Indonesia’s plan to expand its biodiesel mandates from 1 January 2025 has raised concerns that it could curb global palm oil supplies.
Indonesia’s plan to expand its biodiesel blending ratio mandate from 1 January 2025 appears increasingly likely to be implemented gradually as industry players seek a phased-in implementation, analysts said.
Indonesia’s plan to increase the mandatory blending ratio of palm oil in biodiesel from 35 per cent to 40 per cent, known as the B40 directive, is a policy that has sparked a rise in palm futures and is likely to push up palm oil prices further in 2025.
While the Prabowo Subianto administration has repeatedly said the programme is expected to be fully operational by 2025, industry observers say cost and technical challenges could lead to implementation in only some parts of the country’s numerous archipelagos before it is fully implemented.
Eniya Listiani Dewi, a senior energy ministry official, said the mandatory increase would not be phased in gradually and that biodiesel producers were ready to supply higher blends.