Indonesia is set to implement a B50 biodiesel mandate beginning July 1, following a nearly six-month trial period that yielded positive results. Energy Minister Bahlil Lahadalia announced the upcoming policy, which will introduce a blend comprising 50 percent crude palm oil (CPO) and 50 percent fossil diesel. The new blend has undergone extensive testing across various sectors, including heavy equipment, marine vessels, railway transportation, and road trucks.
Minister Lahadalia stated that the initiative aims to bolster the nation’s energy security by decreasing reliance on imported fuels and enhancing the utilization of domestic renewable resources. He emphasized that recent geopolitical instability in the Middle East underscores the vulnerabilities faced by countries heavily dependent on external energy supplies, necessitating a robust diversification strategy.
Indonesia currently operates under a B40 mandate, which incorporates a 40 percent palm-based biodiesel component with 60 percent petroleum diesel. This program has reportedly led to a reduction in diesel imports by 3.3 million kiloliters and a decrease in carbon emissions by 38.88 million tonnes of CO2 equivalent. Government figures for 2025 indicated that biodiesel utilization reached 14.2 million kiloliters, exceeding the target of 13.5 million kiloliters by 105.2 percent.
The transition to B50 is aligned with President Prabowo Subianto’s broader strategy to enhance national resilience against global supply chain disruptions. Officials project that the policy could reduce fossil fuel consumption by approximately 4 million kiloliters annually. Coordinating Economic Minister Airlangga Hartarto previously estimated the move could also generate savings of up to Rp48 trillion, equivalent to about US$2.81 billion, in energy subsidies.
State-owned energy company PT Pertamina has affirmed its readiness to support the implementation, including ensuring supply and distribution networks are prepared. As the world’s largest producer of palm oil, Indonesia has progressively expanded its biodiesel programs over the past decade to curb fuel imports and stabilize demand for its domestic palm oil resources.
Authorities plan a gradual rollout of the B50 program to guarantee stable supply chains and technical readiness across all implicated sectors. Ongoing evaluations will be conducted during the initial phases to monitor performance and address any operational challenges that may arise.
Source: Original
