B50 Biodiesel Mandate to Have 3-Month Transition Period, Energy Ministry Explains Why
The Ministry of Energy and Mineral Resources (ESDM) has stated that there will be a three-month transition period for the full implementation of the 50% biodiesel mandate, known as B50, which is set to begin on 1 July 2026.
This transition period is designed to provide businesses with the necessary time to exhaust existing B40 mandatory stocks and to adjust technical specifications for fuel blending in the field.
The Director General of New, Renewable Energy and Energy Conservation (EBTKE) at the Ministry of ESDM, Eniya Listiani Dewi, explained that this transition is essential to ensure the shift from B40 to B50 proceeds smoothly without supply disruptions. She emphasised that all distribution points across Indonesia are required to be fully supplying B50 by 1 October 2026.
“The transition period is set for three months. This period serves two purposes: first, to exhaust existing stocks; and second, to manage refineries where B40 may still be available. Blending B40 with B50 will naturally result in slightly different specifications, but they will certainly remain above 40%,” she explained during the CNBC Indonesia Energy Forum in Jakarta.
The government notes that approximately 30 fuel enterprises are involved in the B50 programme, with PT Pertamina (Persero) and PT AKR Corporindo Tbk holding the largest quotas. Pertamina has committed to clearing its old stocks in storage facilities within two months.
“Pertamina has promised to clear all stocks within two months. The others account for about 30%. Since those two represent 70% of the share, we have adjusted the period to three months. By 1 October, all points must be fully B50,” she added.
Regarding the legal framework, the Ministry of ESDM has issued Ministerial Decree (Kepmen) ESDM Number 257 of 2026, which regulates the mandate and technical specifications for the biodiesel. The government is also currently finalising the revision of the decree regarding volume allocation, which is expected to be released before the mandate begins next month.
“The decree for allocation must be issued before 1 July, as contracts cannot be made without it. We have calculated the necessary increases, and their production capacity is sufficient,” she added.
The government has confirmed that national production capacity is currently adequate to support the increased palm oil blend composition. Furthermore, the government is preparing administrative sanctions for businesses that fail to comply with blending requirements to ensure adherence to this energy sovereignty programme.
“If a company fails to meet the blending requirements, they will receive a warning and administrative sanctions. The adjustments are being finalised in accordance with prevailing laws,” she concluded.
Legal Framework
The Minister of Energy and Mineral Resources, Bahlil Lahadalia, has officially issued Ministerial Decree ESDM Number 257.K/EK.01/MEM.E/2026 regarding the Obligation to Mix Biofuel (Biodiesel) with Fuel Oil (Diesel) at a rate of 50% under the financing framework of the Plantation Fund Management Agency (BPDPKS).
This regulation mandates the blending of biodiesel into diesel fuel at a 50% ratio (B50). The B50 mandate officially takes effect on 1 July 2026.
The regulation was signed by Minister Bahlil on 17 June 2026. The decree states that if any errors are found in the future, corrections will be made in accordance with the law.
The key points regulating the B50 blending implementation are as follows:
First: To accelerate the implementation of the Government’s policy, the target for blending biodiesel with diesel fuel is set at a minimum of 50% for all types of diesel fuel.
Second: In implementing the blending, biofuel enterprises, distributors, and fuel enterprises must apply the technical standards and quality specifications for biodiesel as outlined in the decree’s appendix.
Third: The quality and technical specifications for biodiesel apply to the 50% blending process with diesel fuel.
Fourth: Biofuel enterprises, distributors, and fuel enterprises must maintain the quality of the biodiesel blend according to the specified standards.
Fifth: The use of biodiesel as a blend for diesel fuel is subject to incentive provisions through the financing framework of the Plantation Fund Management Agency, in accordance with the policies of the Steering Committee for Plantation Fund Management.
Sixth: In the event that fuel enterprises fail to implement the mandatory blending, or biofuel enterprises fail to supply the required biodiesel for blending according to the minimum target percentage, administrative sanctions will be imposed.