Palm Oil Biodiesel Helps Indonesia Save $3.68 Billion in Foreign Exchange
Jakarta. Indonesia recently reported that its nationwide program of using palm oil-based biodiesel had helped the country save at least $3.68 billion in foreign exchange this year.
Indonesia, the world’s largest palm oil producer, has required the use of biodiesel created by combining the food crop and conventional diesel fuel. The percentage of the palm oil blend keeps on increasing over time. Indonesia currently sets the mandatory palm oil mix at 40 percent in a policy better known as the B40, effective since early 2025. The number corresponds to how much palm oil Indonesia uses in its fuels.
“We have distributed around 6.8 million kiloliters of [B40] biodiesel in the first half of 2025,” Energy Minister Bahlil Lahadalia told a press conference on Monday.
As a result, Indonesia managed to cut down on its fuel imports, resulting in $3.68 billion worth of foreign exchange savings so far this year as of June.
This biodiesel program is also one of Indonesia’s grand strategies to capture more value out of its abundant natural resources, namely by processing raw materials into finished products. The government claimed that turning crude palm oil into biodiesel had created an added value worth Rp 9.51 trillion ($583.4 million).
Indonesia is already halfway done with its target of distributing 13.5 million kiloliters of B40 biodiesel in 2025, according to Bahlil.
The national biodiesel rollout has been on the rise in recent years.
Between 2020 and 2023, the mandatory palm oil content was lower at 30 percent. The country distributed 8.4 million kiloliters of biodiesel in 2020 before it finally went up to 9.3 million kiloliters in 2021, and eventually 10.4 million kiloliters a year later.
The government gradually raised the mandatory rate to 35 percent in 2023, and kept this B35 policy for two years. Indonesia rolled out 12.3 million kiloliters of B35 palm oil biofuels in 2023, and another 13.2 million kiloliters the following year, data showed. The foreign exchange savings from the biodiesel program amounted to around $9.3 billion last year.
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