Indonesia may slow down B40 implementation

The recent reversal of the upward trend in palm oil prices could affect Indonesia’s B40 biodiesel policy, which is scheduled to be introduced in January 2025, according to MAS. High palm oil prices have weakened Indonesia’s export competitiveness, leading to lower revenues from export taxes, a key source used to subsidize domestic biodiesel prices.

In response to this challenge, Indonesia may slow down the pace of implementation of the B40 policy to avoid an excessive shock to the market. This decision reflects the potential impact of high feedstock costs on the sustainability of the biodiesel policy and highlights the dilemma the government faces in balancing export revenue generation with the domestic energy transition.