Despite Indonesia’s steadfast focus on meeting domestic energy needs through the mandatory B40 biodiesel blending program, recent developments have reignited export opportunities to the European Union. A favorable ruling by the World Trade Organization (WTO) ruled against Europe’s countervailing duties, granting Indonesia tariff-free access to the EU biodiesel market. Bloomberg data indicates that, over the past decade, European buyers accounted for an average of 40 percent of Indonesia’s total biodiesel exports even as the volume dropped to just 27,407 kiloliters in 2024, the lowest in years. While the WTO decision rejuvenates optimism among palm oil stakeholders, obstacles remain. Analysts from point to the rising demand driven by the nationwide shift from B40 to B50, likely absorbing 90 - 95% of domestic production. As a result, only a minimal share around 5 to 10 % could be exported, limiting immediate export expansion to Europe.
Furthermore, lingering regulatory hurdles such as Europe’s stringent deforestation standards (EUDR) loom large. Market experts caution that smaller producers could struggle to comply with certification requirements, risking exclusion from the EU market even in the wake of a WTO win.
Wednesday, 27 August 2025 10:29
Prospects for Indonesian Palm-Based Biodiesel Exports Brighten as EU Doors Reopen
