Indonesia Mandates B50 from 1 July 2026, Saving Rp48 Trillion in Subsidies

Jakarta (ANTARA) - Coordinating Minister for the Economy Airlangga Hartarto announced that Indonesia will enforce a B50 biodiesel policy, blending 50% crude palm oil with diesel, to save Rp48 trillion in subsidies.

“As part of efforts towards energy independence and efficiency, the government is implementing the B50 policy. This will take effect from 1 July 2026,” Airlangga stated during a press conference on government policies in response to global geopolitical conditions, monitored online from Jakarta on Tuesday.

Airlangga added that Pertamina is prepared to implement the policy.

The B50 implementation, according to Airlangga, has the potential to reduce fossil fuel oil consumption by 4 million kilolitres (KL) in one year.

“Of course, within six months there will be savings from fossil fuels and also savings on biodiesel subsidies estimated at Rp48 trillion,” Airlangga said.

On that occasion, the Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia stated that with the B50 implementation, Indonesia will experience a diesel surplus in 2026.

“So, this is good news, once the RDMP (Refinery Development Master Plan) East Kalimantan (Balikpapan Refinery) is operational,” Bahlil said.

Prabowo stated that this step will position Indonesia more securely in facing global energy supply uncertainties.

Currently, the government is implementing a mandatory B40. Bahlil said the B40 policy implementation has reduced diesel imports by 3.3 million kilolitres (KL) and reduced emissions to 38.88 million tonnes of CO2 equivalent.

Based on data from the Ministry of ESDM, domestic biodiesel utilisation from January to December 2025 is recorded at 14.2 million kilolitres (KL), or equivalent to 105.2% of the Main Performance Indicator (IKU) target set at 13.5 million KL for 2025.

This success has a direct impact on the sharp decline in diesel import volumes compared to previous years.

From the foreign exchange savings perspective, the 2025 biodiesel policy has saved Rp130.21 trillion and reduced emissions to 38.88 million tonnes of CO2 equivalent. It has also increased the added value of Crude Palm Oil (CPO) to biodiesel by Rp20.43 trillion.