KAI Drives Efficient Palm Oil Logistics with 18% Growth in Plantation Freight

Plantation freight transported by rail continues to post strong growth, reflecting rising demand for efficient logistics to support Indonesia's palm oil industry and the implementation of the mandatory B50 biodiesel program.

From January 1 to July 31, 2026, PT Kereta Api Indonesia (Persero) transported 374,098 tons of plantation commodities, an 18 percent increase from 317,026 tons during the same period in 2025. The growth represents an additional 57,072 tons of freight.

The positive trend continued in July 2026, when plantation freight reached 51,741 tons, up 24.52 percent from 41,551 tons in July last year, with an additional 10,190 tons transported during the month.

Vice President Corporate Communication KAI Anne Purba explained that crude palm oil (CPO) accounts for most of the plantation commodities transported by rail. She said KAI's rail freight services provide a reliable, high-capacity, and efficient logistics solution that helps ensure the smooth movement of CPO from production areas to processing facilities.

According to Anne, the steady growth in plantation freight reflects increasing customer confidence in KAI's logistics services while reinforcing the railway's role in supporting the distribution of CPO as a key raw material for various industries, including the bioenergy sector, which has become increasingly important in strengthening Indonesia's energy security.

CPO is the primary feedstock for producing Fatty Acid Methyl Ester (FAME), the biodiesel component blended with conventional diesel fuel. Under the B50 program, fuel consists of 50 percent palm oil-based biodiesel and 50 percent petroleum diesel, driving higher demand for CPO across the country.

The implementation of the mandatory B50 biodiesel program on July 1, 2026, is expected to further increase demand for palm oil logistics. Officially launched by President Prabowo Subianto on July 9, 2026, the program represents one of the government's strategic initiatives to strengthen national energy independence.

According to projections from the Ministry of Energy and Mineral Resources, nationwide implementation of B50 will require approximately 16.7 to 18 million kiloliters of biodiesel, equivalent to 15.2 to 16.3 million tons of CPO. The program is expected to generate foreign exchange savings of up to Rp170 trillion, create around 2.1 million jobs, and reduce carbon dioxide emissions by 44.46 million tons.

Anne said the increasing demand for CPO presents greater opportunities for Indonesia's plantation sector. Within the supply chain, rail transportation plays a strategic role in connecting production areas with processing industries through safe, efficient, and sustainable logistics services.

Indonesia's palm oil industry also continues to attract global attention. According to the July 2026 edition of Oilseeds: World Markets and Trade published by the United States Department of Agriculture (USDA), Indonesia is projected to produce 47.5 million tons of palm oil during the 2026/2027 marketing year, accounting for approximately 58.3 percent of global production.

Beyond supporting the movement of plantation commodities, KAI has also begun the phased implementation of B50 fuel across its diesel locomotives and power generator cars since July 1, 2026. The rollout followed comprehensive testing covering engine performance, fuel consumption, combustion stability, emissions, and fuel system reliability to ensure safe and dependable operations.

Anne added that KAI plays an important role in the B50 ecosystem, both through plantation freight services and the gradual adoption of B50 in railway operations. Every stage of the implementation prioritizes safety, operational reliability, and sustainability.

Looking ahead, KAI will continue strengthening its plantation freight services by expanding rolling stock capacity, improving loading and unloading facilities, and enhancing collaboration with customers and stakeholders. These initiatives are expected to reinforce industrial supply chains, support greater utilization of domestic energy resources, and improve the competitiveness of Indonesia's plantation commodities.

Anne concluded that the continued growth of plantation freight demonstrates the increasingly important role of railway logistics in supporting the downstream palm oil industry, facilitating the movement of strategic commodities, and strengthening Indonesia's long-term energy resilience.