Indonesia considers new restrictions on palm oil exports amid rising demand for biodiesel
Indonesia plans to boost domestic biodiesel with its B50 program, requiring diesel to be blended with 50% palm oil, up from 40% under B40. To meet demand, Energy Minister Bahlil Lahadalia said the government may impose export restrictions or Domestic Market Obligations. Global edible oil prices could rise if exports are curtailed.
Indonesia is considering introducing new restrictions on crude palm oil (CPO) exports as part of its ambitious plan to expand domestic biodiesel production.
Energy Minister Bahlil Lahadalia announced the new export regulations in conjunction with the launch of the B50 biodiesel blending program on October 14, according to Millingmea.
The B50 program, scheduled to launch in the second half of 2026, will require diesel to be blended with 50% palm oil, up from the current 40% mandated by the B40. This shift is estimated to increase domestic palm oil demand by 5.3 million tonnes.
To meet the increased demand, the government is considering a range of measures, including expanding oil palm plantations and introducing Domestic Market Obligations (DMOs), which require exporters to allocate a portion of their output for local consumption.
Lahadalia emphasized that, while a final decision has not yet been made, export regulations remain a viable option to support the biodiesel initiative.
Analysts warn that export restrictions could lead to a reduction in global supply and higher prices for edible oils, particularly in countries heavily dependent on Indonesian palm oil.
The government’s discussions are taking place at a time when global food security and commodity prices are under close scrutiny. Analysts note that any measures to restrict palm oil exports could impact entire supply chains, affecting prices and availability worldwide.
It was previously announced that the country intends to completely cease importing the fuel following the launch of the B50 biodiesel blending program.
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Source : Ukr Agro Consult
