B50 Biodiesel Mandate to Have 3-Month Transition Period, Energy Ministry Explains Why

The Ministry of Energy and Mineral Resources (ESDM) has stated there will be a three-month transition period for the full implementation of the mandatory 50% biodiesel blend, or B50, which begins on 1 July 2026. The transition period is considered necessary to allow fuel businesses to use up existing B40 stocks and adjust technical specifications for fuel blending in the field. Director General of New, Renewable Energy and Energy Conservation Eniya Listiani Dewi explained the transition is required to ensure a smooth shift from B40 to B50 without supply disruptions. She stressed that all distribution points in Indonesia must be fully distributing B50 by 1 October 2026. “The transition period is set at three months. So, what does this transition period mean? First, to deplete stocks. Second, if there is still B40 available at refineries, blending it with B50 will result in slightly different specifications, but it will definitely be above 40%,” she explained. The government has recorded around 30 fuel businesses involved in the B50 programme, with PT Pertamina (Persero) and PT AKR Corporindo Tbk holding the largest quotas. Pertamina has committed to clearing all old stocks at its storage facilities within two months. “Pertamina has promised to clear all stocks in two months. The others account for about 30%. So, those two already hold a 70% share. That is why we set the transition at three months. By 1 October, all points must be fully B50,” she said. On the legal side, the ministry has issued Ministerial Decree No. 257 of 2026, which regulates the mandate and technical specifications for the biodiesel. The government is also finalising a revision to the allocation volume decree, which must be issued before the mandate begins. “The allocation decree must be issued before 1 July. Otherwise, contracts cannot be made. We have already calculated the additions, and their production capacity is sufficient,” she added. The government has confirmed that national production capacity is adequate to support the increased palm oil blend composition. Administrative sanctions are also being prepared for businesses that fail to comply with the blending requirements to ensure adherence to this energy sovereignty programme. “If a company fails to comply or carry out the blending, a warning will be issued, followed by administrative sanctions. The dictum of the ministerial decree I finalised with the Director General of Oil and Gas stipulates that adjustments will be made in accordance with statutory regulations,” she concluded. Minister of Energy and Mineral Resources Bahlil Lahadalia officially issued Decree No. 257.K/EK.01/MEM.E/2026 concerning the obligation to blend 50% biodiesel into diesel fuel within the financing framework of the Plantation Fund Management Agency. The regulation mandates the blending of 50% biodiesel into diesel fuel, effective 1 July 2026. The decree was signed by Minister Bahlil on 17 June 2026 and takes effect on 1 July 2026. Key points of the regulation include the mandatory 50% minimum blend target for all diesel fuel, the obligation for biofuel businesses, distributors, and fuel businesses to adhere to the specified biodiesel standards and quality, and the provision of incentives through the Plantation Fund Management Agency’s financing framework. The decree also stipulates that fuel businesses failing to meet the blending obligation or biofuel businesses failing to distribute biodiesel for blending will be subject to sanctions.