Indonesia to Implement B50 Biodiesel Blend Starting July 2026

The Indonesian Ministry of Energy and Mineral Resources (ESDM) has confirmed the implementation of a mandatory biodiesel blend known as B50, which consists of 50% biodiesel derived from palm oil and 50% diesel fuel. This policy is set to take effect on July 1, 2026, with a transitional period allowing businesses to deplete existing stocks of the previous B40 blend until October 1, 2026.

As part of this initiative, the government has established the Market Price Index (Harga Indeks Pasar, HIP) for biodiesel at Rp 14,562 (approximately $0.95) per liter for July 2026, a slight decrease from Rp 14,643 (around $0.96) in June 2026. The price calculation is based on the average price of crude palm oil (CPO) plus a conversion cost of $85 per metric ton, multiplied by a conversion factor of 870 kilograms per cubic meter, along with transportation costs.

“During this transition, the specifications of the diesel fuel will still be above B40 before fully reaching B50.”Eniya Listiani Dewi, Director General of New Renewable Energy and Energy Conservation

Eniya Listiani Dewi, Director General of New Renewable Energy and Energy Conservation at ESDM, emphasized the importance of this transition period, stating that it allows businesses to exhaust their B40 stocks while gradually moving towards the B50 blend. "During this transition, the specifications of the diesel fuel will still be above B40 before fully reaching B50," she explained during an Energy Forum event.

The B50 program is part of Indonesia's broader strategy to enhance energy security and reduce dependence on imported diesel fuel. The government anticipates that this policy could save up to Rp 157.28 trillion (approximately $10.5 billion) in energy import costs by 2026. The initiative aligns with the Presidential Regulation No. 132 of 2024 regarding the management of plantation funds.

In addition to biodiesel, the government has set the HIP for bioethanol at Rp 10,933 (around $0.73) per liter for July 2026, which reflects an increase from Rp 8,062 (approximately $0.54) in June 2026. This increase highlights the government's commitment to promoting renewable energy sources as part of its energy mix.

“This policy could save up to Rp 157.28 trillion in energy import costs by 2026.”Ministry of Energy and Mineral Resources

As the B50 program rolls out, the government has mandated that all fuel blending businesses adhere to specific standards and quality controls to ensure that the biodiesel meets required specifications. Failure to comply may result in administrative sanctions, including written warnings or even suspension of business licenses.

Overall, the B50 initiative marks a significant step in Indonesia's efforts to transition towards more sustainable energy practices while fostering domestic production of renewable energy sources.