ECONOMIC AND FINANCIAL FEASIBILITY ANALYSIS OF B50 BIODIESEL IMPLEMENTATION IN INDONESIA
Main Article Content
Dyah Ratna Paramith
B50 biodiesel implementation in Indonesia is an important step towards energy security, reducing dependence on fossil fuels, and promoting sustainability in the palm oil industry. This research attempts to analyze the economic and financial viability of B50 biodiesel by examining supply-demand dynamics, cost structures, investment requirements, and market pricing mechanisms. Furthermore, it analyzes the impact of B50 on the domestic palm oil industry, the prospects for export activity, and how financially sustainable are its implementations. The methods mixed were employed, using qualitative and quantitative analysis. Data were obtained from government reports, industry publications, expert interviews, and econometric modeling. The study analyzes past biodiesel policies, the regulatory framework, and how these factors influence subsidies and incentives in making B50 commercially viable. With respect to the economic aspect, production costs, profitability projections, and risk assessment were performed to achieve a conclusive financial assessment. The research argues that the B50 option will greatly reduce foreign exchange outflow, enhance energy security, and present challenges in terms of supply chain stability, pricing, and market competition. The report underscores the need for policy intervention to put in place better infrastructure, financing regime, and regulatory framework to counter these risks. International trade policies, including the EUDR, create future export challenges for Indonesian palm oil, thereby necessitating proper strategizing concerning the adjustment of domestic consumption and production planning. Lastly, the study concludes that the government support with joint cooperation from the industries will determine the economic and financial viability of B50 biodiesel. Recommended policies include better utilization of degraded lands, improved productivity of smallholders, and ensuring financial incentives for stakeholders. This study is aimed at adding to the ongoing debate regarding sustainable energy policies, which will, with this study, serve as one of the main early references for future biodiesel development strategies in Indonesia.
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