Indonesia Mandates B50 Biodiesel, Aims to Save Rp 157 Trillion in Foreign Exchange

The Indonesian government will begin enforcing a mandatory policy of blending 50% biodiesel (B50) into diesel fuel starting 1 July 2026. This policy is one of the government’s strategies to reduce dependence on diesel imports while strengthening national energy security amidst global geopolitical uncertainty. Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia stated that the implementation of B50 could potentially save up to Rp 157 trillion in foreign exchange by the end of 2026, as diesel imports can be reduced or even halted. “In July we will inaugurate B50, saving Indonesia’s face from dependence on diesel imports. And starting this year, we will no longer import diesel,” Bahlil said at the CNBC Indonesia Energy Forum last Thursday (25/6/2026). With the implementation of B50, Indonesia’s oil import needs are expected to drop from around 1 million barrels per day (bph) to approximately 700,000 bph. Bahlil has also proposed to President Prabowo Subianto the possibility of developing B70 to B80 in the future. B50 is a diesel fuel consisting of a mixture of 50% biodiesel (B100) derived from palm oil-based Fatty Acid Methyl Ester (FAME) and 50% pure diesel. This programme is a continuation of the B40 policy implemented since early 2025. The government has issued Minister of Energy and Mineral Resources Decree Number 257.K/EK.01/MEM.E/2026 concerning the obligation to blend 50% biodiesel into diesel fuel, signed by Minister Bahlil Lahadalia on 17 June 2026. The regulation stipulates that all biofuel business entities, distributors, and fuel business entities must comply with the specified standards and quality. Failure to meet the minimum blending target will result in administrative sanctions, including written warnings, temporary suspension, or revocation of business permits. The Minister will evaluate the implementation of the B50 blending every three months.