B50 Biodiesel Mandate to Commence July 2026 with Three-Month Transition

The Ministry of Energy and Mineral Resources (ESDM) has confirmed that the mandatory blend of 50% palm oil-based biodiesel into diesel fuel (B50) will officially commence on 1 July 2026. The legal basis for the implementation was established through Ministerial Decree No. 257.K/EK.01/MEM.E/2026, signed by Minister Bahlil Lahadalia on 17 June 2026.

Director General of New, Renewable Energy and Energy Conservation (EBTKE) Eniya Listiani Dewi stated that a three-month transition period has been established to allow business entities to clear existing B40 stocks. “The transition period is set for three months. Fuel business entities that still have B40 biodiesel stocks can distribute biosolar until 30 September 2026, according to the previously established specifications,” she explained. Pertamina has reportedly committed to depleting its remaining B40 stocks within two months.

The B50 mandate applies to all business entities involved in the supply chain, including biofuel producers, distributors, and fuel retailers. The regulation stipulates that the 50% blend must meet specific quality standards and specifications. Quarterly evaluations will be conducted by the Minister to monitor implementation progress.

From an economic perspective, the B50 programme is projected to deliver substantial benefits. The Ministry estimates the policy will save up to Rp 157.28 trillion in foreign exchange during 2026, a significant increase from the Rp 140 trillion target under the previous B40 programme. The financing framework for the biodiesel incentive will be managed by the Palm Oil Plantation Fund Management Agency.

The decree also outlines sanctions for non-compliance. Business entities that fail to meet the mandatory blending requirements face administrative penalties, including written warnings, temporary suspension, or revocation of business permits, in accordance with prevailing laws and regulations.