Economic factors to determine Indonesia’s plan to introduce B50 biodiesel

Indonesia’s plan to introduce a B50 biodiesel mandate will hinge on the price relationship between crude oil and crude palm oil, according to a senior government official.
The Southeast Asian nation, the world’s largest palm oil producer, has previously indicated that it intends to implement the B50 policy — which would require biodiesel to contain 50% palm-based fuel — in the second half of 2026. At present, Indonesia enforces a B40 blending requirement.
The biodiesel programme is supported by subsidies funded through palm oil export levies, with subsidy levels adjusted according to the price gap between fossil fuels and palm oil.
Coordinating Minister for Economic Affairs Airlangga Hartarto said the government’s priority this year is to maintain the existing B40 mandate while continuing to assess conditions for a higher blend.
“The president has instructed us to keep B40 in place for now,” Airlangga said. “Evaluations for B50 are ongoing, and we must closely watch the price spread between crude oil and crude palm oil.”
He added that preparations for a possible rollout in the second half of the year are continuing, but current market conditions favour holding the existing policy while remaining ready to move to B50 if circumstances allow.