JAKARTA - The mandatory biodiesel policy has a strategic role in reducing Indonesia's dependence on fuel oil (BBM) imports, especially solar.
Professor of the Faculty of Economics and Business, University of Indonesia (FEB UI), Rhenald Kasali, said that the mandatory biodiesel policy has great potential as a solar substitute. This is supported by the availability of abundant palm oil raw materials in the country as well as the readiness of relatively mature processing technology.
"The biodiesel program is indeed effective in reducing solar imports and improving the energy trade balance through a significant reduction in solar imports. The program can save foreign exchange up to US$8-10 billion per year," he said in Jakarta, Monday (13/4/2026).
Rhenald Kasali hopes for good governance of the palm oil industry to support the sustainability of the biodiesel program. This includes efforts to prevent deforestation, preserve the environment, and respect the rights of indigenous peoples. He also hopes that the biodiesel program can minimize the potential for conflict between food and energy needs (trade-off fuel-food).
"It should be remembered that palm oil is not a homogeneous product for energy. Increasing the allocation of crude palm oil (CPO) to energy can reduce food supplies which trigger difficulties for kitchen substitution, namely scarcity and rising prices of cooking oil," he reminded.
The same was conveyed by the Executive Director of the Palm Oil Agribusiness Strategic Policy Institute (PASPI), Tungkot Sipayung, who said that the development of bioenergy through the mandatory biodiesel policy has contributed greatly to reducing the import of fossil-based fuels.
Tungkot detailed, Indonesia has consistently developed a mandatory biodiesel program ranging from B1 to B50 which is targeted for July 2026. This program is able to reduce dependence on solar imports by around 50%. The implementation of B40 biodiesel has reduced solar imports from 8.3 million kiloliters in 2024 to 5 million kiloliters in 2025, or a reduction of 3.3 million kiloliters.
In terms of import foreign exchange savings, the biodiesel policy in 2025 managed to save Rp130.21 trillion and reduce emissions by 38.88 million tons of CO2 equivalent. Then the B40 program increased the added value of CPO into biodiesel by Rp20.43 trillion.
The implementation of the mandatory policy was carried out by Indonesia gradually from B1 to B2.5 in 2008. The mandatory biodiesel policy continued until it reached B50 through the support of palm oil funds from export levies (levy) managed by the Plantation Fund Management Agency or BPDP.
"One of our current successes is the substitution of imported solar with palm biodiesel," he said.
He reminded that one of Indonesia's goals in developing palm bioenergy is to improve the environment. The use of biodiesel is considered more environmentally friendly because it produces lower greenhouse gas emissions than fossil fuels. He explained, global fossil energy consumption is the main contributor to emissions, namely around 70-80% which triggers global warming and climate change.
"By using palm bioenergy, Indonesia has contributed to reducing global emissions. This means that the use of palm bioenergy also improves the environment and does not damage the environment," he said.
Tungkot believes that palm bioenergy is an important part of Indonesia's ambition to realize self-sufficiency and energy independence in the future. Thus, Indonesia will no longer depend on fossil fuel imports.
The increased utilization of biodiesel in the country will have a wide impact not only on the energy sector but also on the overall economy. This policy has a positive effect on the palm oil industry. Demand for CPO will increase so that it can help maintain the price of fresh fruit bunches (FFB) at the farmer level.
"Therefore, the productivity of oil palm plantations must continue to be improved and bioenergy processing technology must be continuously improved so that more efficient technologies are obtained," he concluded.
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