Source: Oleoscope (Russia)
Indonesia is set to increase its export duty on palm oil from a range of 3-7.5% to 4.5-10% of the benchmark price for crude palm oil. This decision aims to fund an expansion of the compulsory biodiesel blending requirement, as reported by Reuters through industry representatives.
This year, the country has raised the obligatory palm oil percentage in biodiesel blending from 35% to 40%, with plans to elevate it to 50% by 2026 and introduce a 3% blending ratio in jet fuel next year to diminish import levels. The elevated blending requirement is anticipated to raise Indonesia’s industrial palm oil usage by approximately 1 million tons year-on-year, reaching an unprecedented 14.5 million tons for the current season, thereby decreasing the quantity of palm oil available for export.
Kabul Wijayanto, the director of the Plantation Management Agency responsible for the collection and distribution of export duties, announced that the new rates will be implemented three days following the official publication of the regulation.
At present, the document is being evaluated by the Ministry of Justice. The agency is projected to allocate 35.47 trillion rupiah (approximately $2.15 billion) this year to support the biodiesel sector. Toward the end of the previous year, the national government revealed a plan to boost taxes on crude palm oil from 7.5% to 10%, although the legislation has yet to be enacted. Refined palm oil products are subject to lower taxation rates.
According to Indonesia’s palm oil industry association (GAPKI), exports are expected to decline by 6.9% in 2025 compared to the previous year, with projections indicating shipments of around 27.5 million tons.