B50 Biodiesel Implementation Needs Stronger Regulation and Governance

The mandatory B50 biodiesel program in Indonesia needs robust governance to effectively balance energy, economic, social, and environmental considerations, according to Yayan Satyakti, a researcher and lecturer at Universitas Padjadjaran's Faculty of Economics and Business.

Satyakti stated that simply increasing the biodiesel blend is insufficient. The program's success hinges on technological preparedness, raw material productivity, regulatory certainty, and strong institutions managing funding, incentives, and the supply chain. "Increasing the biodiesel mix must be accompanied by increased productivity, technological readiness, institutional strengthening, and regulatory certainty. This is important to support long-term energy security," he said during a seminar.

The seminar, titled "B50 and Indonesian Biodiesel Governance: Finding Common Ground Between Energy, Economy, Society, and Ecology," brought together government, academics, industry players, and civil society. Satyakti argued that energy security encompasses not only supply but also consumption, distribution, affordability, accessibility, and sustainability. He believes biodiesel governance must manage funding and incentives, boost raw material productivity, enhance technological readiness and supply chains, and maintain the balance of economic, social, and environmental impacts.

“

Increasing the biodiesel mix must be accompanied by increased productivity, technological readiness, institutional strengthening, and regulatory certainty. This is important to support long-term energy security.

Tommy Ardian Pratama, Executive Director of Traction Energy Asia, presented findings from a study titled "Is B50 Worth It? The Cost of Indonesia's Biodiesel Mandate and Reforms That Could Change the Answer." This study calculated the often-overlooked costs and consequences of B50 implementation, including fiscal burdens, carbon debt, potential engine damage, and net social benefits.

Pratama noted that the study's findings align with separate research from the Institute for Economic and Community Research (LPEM) at Universitas Indonesia's Faculty of Economics and Business, which also examined the economic consequences of B50. He emphasized that biodiesel is a strategic policy with broad societal impacts, requiring a stronger governance foundation. Current regulations, primarily based on ministerial decrees, need reinforcement.

“

This study wants to see how biodiesel policy can be implemented sustainably by finding common ground between energy, economic, social, and ecological aspects.