Indonesia accelerates transition to B50, supporting palm oil prices

In 2026, Indonesia will continue to work actively on implementing a program to produce biofuels based on B0 palm oil, the country's President Prabowo Subianto said yesterday during an official visit to Japan.

 

In January, Indonesian authorities abandoned plans to introduce a B50 blend this year, containing 50% conventional diesel and 50% palm oil biodiesel, due to technical problems and a lack of funding, leaving the B40 mandate in place.

 

However, amid disruptions in energy supplies due to the war with Iran, the Indonesian government decided to increase the share of biodiesel in fuel from 40% to 50%.

 

Indonesia produces about 48-50 million tons of palm oil each year, of which 12.6-12.7 million tons are used to produce biodiesel. In the case of switching to B50, palm oil use will increase by 2 million tons, and exports will decrease accordingly.

 

Yesterday's statement by the Indonesian president supported palm oil prices, and May futures on the Bursa Malaysia exchange rose 3% yesterday to 4,772 ringgit/t or $1,185/t (+5.2% for the week) on expectations of further strengthening demand.

 

According to surveyors, exports of palm oil products from Malaysia during March 1-25 increased by 38.4-50.6% compared to the corresponding period in February, which also supports palm oil prices.