Indonesia turns to palm oil for energy security

Higher oil prices are pushing importing nations to substitute whatever fuel they can grow at home. Indonesia, the largest palm oil producer, is going further than most.

Indonesia raised its biodiesel mandate to 50% (“B50”) in July, up from the 40% (“B40”) requirement introduced in 2025. By August, biodiesel production was putting more than a quarter of Indonesian palm-oil output to use, and drawing down inventories as well; food-related use of this key agricultural commodity was flat.

Despite this, Indonesia’s exports are still growing. The expensive Malaysian ringgit has helped – making Indonesian palm oil cheaper on a relative basis.