Indonesia axes plan to introduce B50 biodiesel

Indonesia has abandoned plans to introduce a mandatory B50 biodiesel blend this year and will continue with its existing B40 requirement instead, citing technical limitations and funding issues, government officials said on Wednesday.
The decision has eased market concerns about potential pressure on global palm oil supplies.
The country had intended to roll out B50 — a fuel blend containing 50% palm oil-based biodiesel and 50% conventional diesel — in the second half of the year. However, the current B40 mandate, which uses a 40% biodiesel blend, will remain in force.
As the world’s largest producer of palm oil, Indonesia’s biodiesel policies have a significant impact on global prices. Higher domestic consumption typically reduces export availability, influencing international markets.
Officials met on Wednesday to review the biodiesel programme and its financing structure.
“This year we will remain at B40,” said Deputy Minister for Energy and Mineral Resources Yuliot Tanjung following the meeting. “Production of diesel at the Balikpapan refinery is increasing, so B40 is adequate.”
Energy ministry official Eniya Listiani Dewi said the government is reassessing the timetable for completing B50 trials, particularly for applications involving trains, heavy equipment and industrial machinery.
Palm oil benchmark prices in Malaysia fell by 0.52% on Wednesday after the announcement, reversing earlier gains of up to 1.33 per cent during the session.
“Indonesia’s decision to shelve its B50 plan for 2026 is negative for palm oil prices, as the market had anticipated greater absorption of crude palm oil for the higher blend,” said Anilkumar Bagani, head of commodity research at Mumbai-based brokerage Sunvin Group.
According to estimates from Indonesia Palm Oil Strategic Studies, introducing B50 in the second half of this year would have increased crude palm oil consumption by an additional 2.2 million tonnes, bringing total biodiesel usage to around 13.6 million tonnes.