TEMPO.CO, Jakarta - The Indonesia Strategic and Economic Action Institution (ISEAI) stated that the 50 percent biodiesel program (B50) has the potential to reduce the country's foreign exchange earnings by US$2.7 billion per year due to a decrease in the volume of CPO exports.
The figure is based on the assumption of the average CPO price CIF Rotterdam of US$1,356 per metric ton in early 2026.
ISEAI referred to data from the Indonesian Palm Oil Entrepreneurs Association (GAPKI), which projected that national palm oil exports would be cut by around 2 million tons in the second half of 2026, or nearly 4 million tons per year.
"This creates a paradox: the policy to save foreign exchange from diesel imports actually cuts foreign exchange from the national leading agricultural sector," ISEAI said in a written statement on Friday, July 10, 2026.
ISEAI considers that the implementation of the B50 program amidst the stagnation of raw material production will trigger a crisis in the governance of palm oil commodities.
"The direct impact of this shift in allocation is a decrease in the capacity of Indonesia's CPO exports to the international market," said senior ISEAI analyst Rony P. Sasmita.
Based on ISEAI's research, the B50 program, which was inaugurated on July 9, 2026, is being implemented when the growth of Indonesia's crude palm oil (CPO) supply is stagnant. Over the past five years, ISEAI noted that Indonesia's CPO production has flattened at around 48-51 million tons per year due to the slow progress of the People's Oil Palm Rejuvenation (PSR) program and a decrease in plant productivity.
Although CPO production in 2025 grew by 7.26 percent to reach 51.66 million tons, domestic end stocks plummeted sharply by 19.79 percent to only 2.068 million tons due to very high domestic absorption.
As a result, the increasing allocation of CPO for domestic needs, especially for biodiesel (B50), will lead to a decrease in export capacity.
Out of a total domestic consumption of 2.141 million tons as of April 2026, the majority is used for biodiesel with a requirement of 1.137 million tons. The second largest requirement is for the food sector, amounting to 831,000 tons, while the oleochemical sector requires around 173,000 tons.
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