Indonesia Plans New Palm Oil Export Restrictions to Boost Biodiesel Development

Indonesia, the world’s largest palm oil producer, is considering new export restrictions on crude palm oil (CPO) as part of its plan to expand domestic biodiesel production. Energy Minister Bahlil Lahadalia announced on October 14 that the government may regulate exports to ensure sufficient supply for the upcoming B50 mandate, which will raise the palm oil blend in diesel from 40% to 50% starting in late 2026. The shift is expected to increase domestic demand by about 5.3 million tons.

The move aligns with Indonesia’s goal to reduce fossil fuel imports and enhance energy independence. However, analysts warn that restricting exports could tighten global supply and push up edible oil prices. The final decision will depend on whether Indonesia can successfully expand palm oil production to meet both domestic and export needs.