Indonesia’s food sector seeks 10 million tonnes of palm oil as biodiesel demand rises
Indonesia’s food industry requires about 10 million tonnes of crude palm oil annually, while the B50 biodiesel program could consume 15.2–18.7 million tonnes. A future shift to B60 would raise domestic CPO consumption and could reduce export availability unless production grows.
Food sector requires 10 million tonnes
Indonesia’s food industry requires about 10 million tonnes of crude palm oil annually as the country expands the use of palm oil in biodiesel, HAISAWIT reported, citing information published by the Indonesian Palm Oil Association, GAPKI. Food demand is one part of a domestic market that also includes energy and oleochemicals, with the latter requiring about 2.3 million tonnes.
The figures show the growing competition for Indonesia’s palm oil supply. Food processors depend on the commodity for cooking oil and other downstream applications, while government blending mandates are directing increasingly large volumes into fuel. Availability for food, oleochemicals and exports will therefore depend more heavily on the pace of production growth.
B50 could lift combined demand to 29 million tonnes
Under the B50 biodiesel scheme, combined palm oil requirements for energy and food are estimated at about 29 million tonnes. Industry estimates and calculations by the Ministry of Energy and Mineral Resources put the CPO requirement for B50 at between 15.2 million and 18.7 million tonnes annually, equivalent to approximately 19 million kilolitres of fatty acid methyl ester, or FAME.
The government is preparing for full implementation of B50 before advancing toward B60. Eniya Listiani Dewi, director general of new, renewable energy and energy conservation at the ministry, has targeted October 2026 for B50 to take full effect. By the end of August 2026, national implementation was reported at about 80%, while authorities continued to monitor and evaluate companies’ readiness.
The higher blend is part of the government’s strategy to reduce dependence on imported petroleum fuel and promote lower-emission energy. It would also make the energy sector one of the largest consumers of Indonesian palm oil, increasing its influence over domestic supply allocation and pricing.
B60 would intensify pressure on supply
If the program progresses to B60, domestic CPO consumption is projected to reach about 35 million tonnes. B60 alone is expected to require approximately 22–23 million tonnes of CPO per year, compared with an estimated 16–17 million tonnes under B50.
The difference would materially tighten the balance between fuel, food, oleochemical and export demand. HAISAWIT noted that Indonesia’s export allocation could decline if production fails to keep pace with domestic consumption. That would affect international buyers as well as Indonesian exporters, while local food processors could face stronger competition for feedstock.
Productivity becomes the central constraint
Meeting higher demand without opening new land places greater importance on plantation productivity. The measures identified include replanting older trees, improving cultivation practices, using higher-yielding planting material and expanding the smallholder replanting program known as PSR.
Supply readiness will need to be assessed alongside the biodiesel rollout so that fuel demand does not disrupt palm oil availability for food and other downstream industries. Coordination among government agencies, producers, companies and smallholders will be important as Indonesia balances domestic food supply, energy policy, exports and the long-term sustainability of its palm oil industry.
