A senior economist from the Institute for Development of Economics and Finance (Indef), Fadhil Hasan, delivered the remarks during a discussion here on Wednesday.
"The key is increasing the CPO production in the country, be it through the use of degraded lands or other means," he said.
Hasan explained that increasing the biodiesel mix without increasing CPO production would cause a decline in exports. This is because most of the CPO would then be used to meet domestic needs.
According to him, such a fall in exports could trigger an increase in CPO prices in the international market, which could eventually push up the prices of cooking oil in the country.
He further said that the decision to increase the biodiesel mix to 50 percent needs to be considered carefully through a comprehensive study.
The B40 biodiesel policy is considered to be still applicable, while further increases could potentially cause disruptions in the global vegetable oil industry and have an impact on the domestic market.
The government has expressed Indonesia's readiness to increase the biodiesel mix from 35 percent (B35) to 40 percent (B40) by 2025, as well as making preparations for the implementation of B50.
Earlier here on Tuesday, Agriculture Minister Andi Amran Sulaiman said that Indonesia has sufficient stocks of CPO to produce B50 biodiesel.
Of the around 46 million tons of the CPO produced in the country, only 5.3 million tons are needed to produce B50.
"Our CPO production is 46 million tons. Currently, we use 20 million tons of CPO domestically and export 26 million tons. If we take 5.3 million tons (for B50), it will not be a problem," he explained.
According to the Ministry of Agriculture, the total national palm oil production reached 51.98 million tons in 2023.
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Translator: Shofi Ayudiana, Raka Adji
Editor: Rahmad Nasution
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