GAPKI urges flexible biodiesel mandate, faster replanting
Friday, May 1 2026 - 09:00 AM WIB
By Pandu Setiabudi
The Indonesian Palm Oil Association (GAPKI) has called on the government to introduce greater flexibility in the biodiesel blending mandate and accelerate smallholder replanting efforts, warning of potential risks to exports and domestic supply balance under the planned B50 program.
GAPKI Vice Chairman Eddy Martono said the B50 mandate should not be treated as a fixed policy, particularly given the volatility of global oil prices.
“We hope there will be flexibility in the blending mandate. B50 should not be implemented rigidly without considering global market dynamics,” he said at the Power Talk B50 event on April 30.
Industry studies suggest that a blending level of around B35 remains optimal under normal oil price conditions. If global oil prices decline, maintaining B50 could significantly increase the burden of subsidies and incentives, making policy flexibility crucial to preserving economic efficiency.
From a supply perspective, GAPKI estimates that implementing B50 would raise domestic crude palm oil (CPO) demand by approximately 3 million tons per year. However, national production has remained relatively stagnant, raising concerns over supply tightness.
Without adjustments, Eddy warned, the policy could disrupt the domestic supply-demand balance and affect Indonesia’s export position. Key importing countries, such as India, have already begun seeking alternative vegetable oil sources.
Read also : APROBI seeks 940,000 kL for B50, warns of 2027 supply gap
“We must continue to meet global demand, or we risk losing market share,” he said.
As a long-term solution, GAPKI emphasized the need to accelerate the Smallholder Replanting Program (PSR) to boost productivity. According to the association, the main constraint lies not in land availability but in the low yields of smallholder plantations.
Although significant funding for PSR is available through the Plantation Fund Management Agency (BPDP), program uptake has remained limited.
GAPKI estimates that Indonesia’s CPO production, which stood at 51.6 million tons last year, could exceed 60 million tons if replanting efforts are effectively implemented—more than sufficient to support the B50 mandate without compromising exports.
While reiterating its support for the biodiesel program, GAPKI urged policymakers to carefully balance domestic energy goals with the sustainability of the palm oil sector.
Editing by Reiner Simanjuntak