Indonesia reaffirms B40 biodiesel program for January 2025

Nov. 13|The Indonesian government on Wednesday reiterated to lawmakers that it will implement the B40 biodiesel program in January 2025 as part of the new government’s “Rapid Results” program, sources said.

The program was mentioned in a speech by Indonesia’s Energy Minister Bahlil Lahadalia, who also told a parliamentary hearing that the government expects to implement the B50 program in 2026.

Raising the biodiesel blend to 40% from the current 35% is meant to reduce fuel imports, which analysts say will increase palm oil demand and support prices.

Malaysian palm oil futures are up about 35% this year. At an industry conference last week, Oil World analyst Thomas Mielke estimated that the introduction of B40 would push prices up another 10-15 percent.

This statement from Indonesia’s energy minister about the timeline of the B50 implementation plan is more aggressive than a statement from a senior Indonesian official at the Indonesian Palm Oil Conference last week, who said last week that the government was considering increasing the biodiesel blend ratio by 2028.