CIMB Securities, a leading investment bank in Indonesia, recently published a study suggesting that if the Indonesian government implements the B50 biodiesel mandate, domestic palm oil consumption could rise by approximately 3 million tonnes. This increase would represent about 6.2% of the projected 2024 crude palm oil (CPO) production, which stands at 48.2 million tonnes.

The study notes that the B50 policy, expected to take effect in 2026, may provide additional support to CPO prices by offsetting the negative impact of the U.S. decision to raise palm oil import tariffs—19% for Indonesia and 25% for Malaysia—effective from August 1, 2025.

Indonesia’s Ministry of Energy and Mineral Resources has announced plans to adopt the B50 standard, although the final mandate for 2025 has yet to be confirmed. The government is still consulting with experts and assessing feedstock availability and refining capacity. The ministry indicated that five new biodiesel plants would be required to support B50 implementation, but only three are currently under construction.

CIMB remains optimistic about Indonesia’s ability to achieve its B40 blending target in 2025, which could boost domestic CPO consumption by 2 million tonnes and reduce export surpluses. Out of the allocated 15.62 million kiloliters of biodiesel, 7.55 million kiloliters (48%) will be used in public services such as transportation and fully subsidized, while the remaining portion will be sold at market prices without subsidies.

The bank emphasized that the potential rollout of B50 is a key factor to watch, as it may tighten Indonesia’s palm oil exports in 2026, providing short-term price support. Meanwhile, Malaysia is expected to raise its CPO reference price and increase export tariffs to 9% in August.