Indonesia’s B40 biodiesel mandate goes into effect, B50 planned for 2026
Indonesia’s ministry of energy and mineral resources confirmed Jan. 3 that the country’s 40 percent palm oil-based biodiesel fuel (B40) mandate has indeed gone into effect Jan. 1.
This decision was conveyed directly by Bahlil Lahadalia, the minister of energy and mineral resources, in a press conference at the ministry office in Jakarta Jan. 3.
“The energy and mineral resources ministry has just finished holding an internal meeting to discuss in detail the biodiesel issue,” Bahlil said.
“We have decided to increase biodiesel from B35 to B40, and today we announce that it has been in effect starting Jan. 1, 2025,” he added.
This step, according to Bahlil, is in line with the Asta Cita agenda of Indonesian President Prabowo Subianto regarding energy security and self-sufficiency, as well as the government’s target of achieving net-zero emissions by 2060.
The government has even prepared a plan for further increase to B50 by 2026.
“If this goes well, under the direction of President Prabowo, we will push for the implementation of B50 in 2026 and if we do this, then our imports of diesel, God willing, will definitely be gone by 2026,” Bahlil said.
“So this (mandatory biodiesel) program is part of the president’s order regarding energy security and reducing imports,” he said.
Eniya Listiani Dewi, Indonesia’s director-general of renewable energy and energy conservation, said the mandatory biodiesel program can reduce fuel imports, saving foreign exchange.
Foreign-exchange savings for B40 amount to 147.5 trillion Indonesian rupiahs (USD$9.1 billion), while for B35 it can save 122.98 trillion Indonesian rupiahs (USD$7.6 billion), according to the ministry of energy and mineral resources.
Thus, there is a foreign-exchange saving of around 25 trillion Indonesian rupiahs (USD$1.55 billion) by not importing diesel fuel.
In addition to providing economic benefits, the Indonesian government said the mandatory B40 biodiesel program itself has provided significant benefits in various social and environmental aspects including:
Increasing the added value of crude palm oil (CPO) into biodiesel by 20.9 trillion Indonesian rupiahs (USD$1.3 billion).
Absorbing more than 14,000 people (off-farm) and 1.95 million people (on-farm).
Reducing greenhouse-gas emissions by 41.46 million tons of CO2e per year.
In 2025, the government has set a B40 allocation of 15.6 billion liters (4.12 billion gallons) of biodiesel with 7.55 billion liters (approximately 2 billion gallons) allocated for Public Service Obligation and 8.07 billion liters (2.13 billion gallons) allocated for non-PSO.
The distribution of B40 biodiesel in Indonesia will be supported by approximately two dozen businesses.
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