Jakarta. Indonesia has told Pakistan that it could rest assured that Jakarta’s upcoming B50 biodiesel mandate would not affect the palm oil exports bound for Islamabad and elsewhere.

Indonesia has implemented a mandatory 40% palm oil-based biodiesel blend, known as the B40. The world’s largest palm oil supplier is now planning to impose the B50 later this year, which will see the government raising the mandatory blend to 50%. Deputy Trade Minister Dyah Roro Esti Widya Putri said the greater palm oil content would not affect the shipments to international partners, including Pakistan.

“All biodiesel policies, such as the B50 program, will not disrupt palm oil export,” Dyah Roro told a recent conference with Pakistani businesses in Karachi.

Pakistan is the third-largest foreign consumer of Indonesian palm oil, just behind China and India. Indonesia’s exports to Pakistan neared $3.5 billion in January-November 2025. Almost $2.8 billion of Indonesian exports were shipments of goods under the category of “animal fats/vegetable oil”, Trade Ministry data revealed. 

Indonesia is exporting palm oil to Pakistan at the same lowered tariff rates as its competitor Malaysia, thanks to a decade-old preferential trade agreement with Islamabad. Indonesia is now aiming to wrap up the negotiations for a Pakistan comprehensive economic partnership agreement (CEPA) by 2027. A CEPA-level trade treaty typically grants greater tariff elimination.

Forging Ahead with B50 Plan
The government data showed Indonesia’s B40 biodiesel output totaled 14.2 million kiloliters throughout 2025 despite initially targeting to produce 13.5 million kiloliters. The program enabled Indonesia to save Rp 130.2 trillion ($7.7 billion) in foreign exchange throughout 2025, while cutting emissions by nearly 38.9 million tons of carbon dioxide equivalent. Indonesia generated Rp 20.4 trillion ($1.2 billion) in added value from turning crude palm oil into biodiesel. 

Earlier this month, Energy Minister Bahlil Lahadalia said “the B50 mandate could start in the second half of 2026 following tests”. Bahlil was also confident that the B50 policy, coupled with the operations of an upcoming $7.4 billion Balikpapan refinery project, should allow Indonesia to cease diesel fuel imports.

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