Association says Indonesian biodiesel demand will reach 15 million metric tonnes at the launch of B50

The Indonesian palm oil association said on Wednesday that the demand for biodiesel was expected to be 15 million metric tons this year. This is an increase of 2 mts from last year.

B50, a biodiesel blend of 50% palm-oil-based biodiesel with 50% conventional diesel, will be implemented on July 1, this year as part of an overall government program to reduce the risk of war in Iran.

Biodiesel mandates in Indonesia, which is the largest palm oil exporter in the world, have pushed palm oil prices up in recent years, as the increasing blend has limited the supply on the global market.

GAPKI, the industry association, predicted that palm oil exports would drop to 30 million tons in 2026, down from 32 million tons last year.

Indonesia exported 4,54 million metric tonnes of crude palm oil and refined palm oils in the first half of 2026. This is up 36.26 percent from the same time period last year, according to data released by the statistics bureau on Wednesday.

A Finance Ministry regulation published last month showed that Indonesia had increased its crude palm oil export tax from 10% to 12.5%. Officials have stated that this is a measure taken 'to help pay for the cost of increasing the biodiesel mandate.

Hadi Sugeng is the GAPKI secretary-general. He said on Wednesday that, despite the move to B50 he expects the 'palm oil export leviey' to be retained as the gap between the prices of palm oil and gasoil has been narrowing.

Biodiesel costs more than petroleum diesel, so Indonesia uses the proceeds of a levy on palm oil exports to fund its biodiesel program. (Reporting and writing by Bernadette Christopher; editing by David Stanway, John Mair and Stanley Widianto)

(source: Reuters)