Jakarta. Indonesia is seeing positive results in its road trials to have biodiesel with a higher palm oil blend, according to senior officials, as the country is only about two weeks away from the launch.

Indonesia is turning to B50 -- a mandatory blend of 50% palm oil-based biodiesel with conventional diesel making up the remaining half. The current biofuel blend stands at 40%.

“We have tried using B50 in many types of vehicles, including heavy equipment, ships, and trains. The same goes for mining and agricultural equipment,” Energy Minister Bahlil Lahadalia told the press in Jakarta on Thursday.

“I’m very optimistic about the B50 official rollout on July 1. We should be able to reduce or even stop importing diesel fuel entirely, particularly the C48 [Cetane 48] grade.”

Bahlil’s aide Eniya Listiani Dewi revealed that the B50 would put less financial pressure on BPDPKS, the country’s oil palm funding agency. This body manages the money collected from export levies to bankroll the biofuel program and replanting efforts. The current B40 requires funds of roughly Rp 47 trillion ($2.6 billion) annually.

“The B50 policy will bring down the figure to Rp 32 trillion ($1.8 billion),” Eniya said.

The government estimates that the B50 mandate will enable the country to save up to Rp 157.28 trillion ($8.8 billion) in foreign exchange this year as Indonesia buys less foreign fuel. This marks a major jump from the Rp 133.3 trillion (nearly $7.5 billion) in foreign exchange savings last year. 

Both Indonesia and Malaysia make up the lion's share of the global palm oil supplies.

B50 is set to create added value worth Rp 24.68 trillion (nearly $1.4 billion) on Indonesian crude palm oil that is found in almost half of supermarket goods. The government has long had a big appetite for the B50, even more so after the prolonged Iran war caused global crude prices to consistently pierce through the $100-dollar-per-barrel barrier.

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