B50 Biodiesel Mandate to Commence 1 July, Here's the Palm Oil Biodiesel Price

The Ministry of Energy and Mineral Resources (ESDM) has set the implementation of diesel fuel with a 50% palm oil-based biodiesel blend (B50) to take effect on 1 July 2026.

Eniya Listiani Dewi, Director General of New, Renewable Energy and Energy Conservation (EBTKE) at the Ministry of ESDM, stated that while the B50 mandate officially begins on 1 July 2026, the government is providing a three-month transition period for businesses to exhaust their B40 stocks. This means full implementation of B50 will be realised by 1 October 2026.

“As of 1 July, we move to B50. The second point is the transition period, which is set for three months. This transition period is intended to exhaust existing stocks,” Eniya explained during the CNBC Indonesia Energy Forum last week.

She noted that the transition is necessary so that B40 stocks in refineries and blending facilities can be depleted first. During this period, the specification of circulating diesel may remain above B40 before gradually reaching the 5/50 composition.

“If B40 is still available in refineries, blending it with B50 will naturally result in slightly different specifications, but they will certainly be above 40%. Therefore, we are providing a transition period where the specification will be above 40% but will gradually move towards 50%,” she said.

Regarding the price of biodiesel, the Directorate General of New, Renewable Energy and Energy Conservation (EBTKE) has set the Market Index Price (HIP) for biodiesel for the July 2026 period at Rp14,562 per litre, plus transport costs.

The calculation for the biodiesel HIP refers to the formula: (Average CPO KPB Price + US$85 per tonne) x 870 kg/m³ + transport costs. The average price of Crude Palm Oil (CPO) KPB for the period of 25 May to 24 June 2026 was Rp15,217 per kg. The conversion value for biodiesel raw materials is set at US$85 per metric tonne, with a conversion factor from kilograms to litres of 870 kg/m³.

Transport costs follow the Decree of the Minister of ESDM Number 290.K/EK.05/MEM.E/2025, while the exchange rate used refers to the average Bank Indonesia middle rate for the period of 25 May–24 June 2026, at Rp17,895 per US$.

Regarding the B50 regulations, the Minister of Energy and Mineral Resources, Bahlil Lahadalia, has issued the Decree of the Minister of Energy and Mineral Resources (ESDM) Number 257.K/EK.01/MEM.E/2026 concerning the Obligation to Blend Biofuel Types of Biodiesel with Diesel Fuel at a 50% rate under the Financing Framework by the Palm Oil Fund Management Agency.

This regulation mandates the blending of biofuel (biodiesel) into diesel fuel at a rate of 50% (B50) and comes into force on 1 July 2026. The regulation was signed by Bahlil on 17 June 2026.

“This Ministerial Decree shall come into effect on 1 July 2026, with the provision that if any errors are found hereafter, corrections will be made accordingly in accordance with the provisions of the prevailing laws and regulations,” the regulation stated, as reported on Tuesday (30/6/2026).

Key points regulating the implementation of B50 blending into diesel include:

First: To accelerate the implementation of the Government’s policy in blending biodiesel with diesel fuel, a minimum implementation target of 50% is set for all types of diesel fuel.

Second: In carrying out the blending, biofuel businesses, distributors, and fuel businesses must apply the standards and quality (specifications) of biodiesel as listed in the Appendix of this Ministerial Decree.

Third: The standards and quality (speculations) for biodiesel apply to the blending with diesel fuel at a 50% rate.

Fourth: Biofuel businesses, distributors, and fuel businesses must maintain the quality of the blended biodiesel in accordance with the specified standards.

Fifth: The use of biodiesel as a blend in certain diesel fuels is subject to incentive provisions through the financing framework by the Palm Oil Fund Management Agency, in accordance with the policy of the Steering Committee for Palm Oil Fund Management.

Sixth: In the event that: (a) fuel businesses fail to implement the mandatory blending of biodiesel into diesel; or (b) biofuel businesses fail to carry out the distribution of biodiesel for blending, they shall be subject to administrative sanctions including written warnings, temporary suspension, and/or revocation of business licences.

Seventh: Biofuel and fuel businesses must undertake the necessary preparations for the utilisation and blending as specified.

Eighth: The evaluation of the implementation of the blending will be conducted by the Minister every three (3) months.

Ninth: At the time the Ministerial Decree comes into effect, fuel businesses that still possess stocks of biodiesel for…