If B60 Is Implemented, Where Will Indonesia's CPO Be Allocated?

Indonesia has not yet fully completed the implementation of B50, but the discourse towards B60 has already begun to raise new questions about the distribution of CPO supply. B50 means diesel fuel mixed with 50 percent palm-based biodiesel. If at some point the blend is increased to B60, the biodiesel portion in the mix will increase to 60 percent. Since Indonesia's biodiesel is primarily produced from palm oil, this increase in the blend means that the demand for CPO for fuel will also rise. The issue then is not only whether B60 can be implemented, but where the additional CPO will come from and which sector must adjust.

The Indonesian Palm Oil Association (GAPKI), as reported by Bloomberg Technoz on September 7, 2026, estimates that B60 will require around 22–23 million tons of CPO per year. This figure is significantly higher compared to the B50 requirement, which is estimated at around 16–17 million tons. GAPKI calculates that total domestic consumption could increase from around 29 million tons under the B50 scenario to around 35 million tons if B60 is implemented.

However, B60 is currently still a scenario. Even the distribution of B50 has not reached full capacity. The Ministry of Energy and Mineral Resources (ESDM) recorded that the national distribution of B50 was only around 75–80 percent as of August 31, 2026, although in the Pertamina network it was about 90 percent. The government targets the distribution of B50 to reach 100 percent by October 1, 2026. This means that the experience of implementing B50 in the coming months will be one of the important foundations before discussions on B60 move further.

The significant change in demand has actually been evident since the transition from B40 to B50. According to IPOSS calculations, the CPO requirement for biodiesel increased from around 1.13 million tons per month under B40 to around 1.42 million tons per month under B50. The additional absorption reached about 283,000 tons per month or around 1.70 million tons during July–December 2026. IPOSS also estimates that biodiesel absorbed nearly 60 percent of total domestic palm oil consumption in the third quarter of 2026.

This is where the term “allocation to energy” becomes important. It does not mean that CPO is used directly as energy, but rather that palm oil is processed into biodiesel, which is then used as a diesel fuel blend. The higher the blend mandate, the greater the volume of palm oil that must be prepared for biodiesel needs. This means that the portion of palm oil production previously available for other uses will become increasingly limited if national production does not also increase.

If the blend is increased again to B60, the CPO requirement for biodiesel will rise. As a result, the portion of CPO allocated from national production for biodiesel will also increase, making the volume available for other needs more limited. Yet, CPO is also needed for food, oleochemicals, stock, and export. In the Indonesian Palm Oil Industry Outlook 2026, IPOSS projects national palm oil production at around 49.8 million tons and has already warned that strengthening domestic consumption will narrow the export space.

Exports are not a small item that can be easily ignored. BPS data shows that the value of Indonesia's palm oil exports from January to June 2026 reached approximately US$14.57 billion. Therefore, any additional allocation of CPO for biodiesel has the potential to impact the volume available for the foreign market if production does not increase at the same pace.

The change in biodiesel blend is continuously shifting the pattern of CPO usage in Indonesia. If B60 is implemented at some point, the portion of palm oil for biodiesel will increase again beyond the needs that have already risen through B50. At the same time, the needs for food, oleochemicals, export, and stock must continue. Therefore, the question about B60 ultimately is not only about how high the biodiesel blend can be increased, but also how Indonesia allocates its palm oil production among various equally important needs.