Indonesia’s B50 mandate to start July 1, industry says CPO output must rise to 55–60 million tonnes to meet demand
AI Market Summary
Indonesia's mandatory shift to B50 biodiesel on July 1 increases domestic crude palm oil use to ~16.3–17.0m tonnes, diverting supply from exports by an estimated 4–5m tonnes. Near-term supply appears manageable, but the industry warns sustained implementation requires higher output and faster smallholder replanting. Lower export volumes could reduce levy-funded BPDP resources, tightening funding for biodiesel subsidies and replanting programs.
Impact level
● Medium
Affected assets
NCCOCOTTON2USD/USDT-1.10%
AI Insight · NCCOCOTTON2USD/USDTAI Insight
● Neutral
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Indonesia will mandate B50 biodiesel blending from July 1, lifting crude palm oil (CPO) use for biodiesel in 2024 to 16.3–17.0 million tonnes, about 1.74 million tonnes more than under B40. Industry groups say current production can cover the increase this year, but argue annual CPO output needs to climb to 55–60 million tonnes to sustain the policy. Smallholders are urging faster replanting of aging trees to raise yields rather than expanding plantations. The shift could cut exports by 4–5 million tonnes and weaken BPDP levy revenue that funds subsidies and replanting, while total CPO demand rises to about 77 million tonnes.
