Indonesia's New B50 Biodiesel to Roll Out in July 2026, Pricing Remains Under Wraps

Jakarta, CNBC Indonesia - The Ministry of Energy and Mineral Resources (ESDM) is targeting the implementation of the mandatory 50% biodiesel blend, or B50, a diesel fuel mixed with 50% palm oil, to begin on 1 July 2026. Minister of Energy and Mineral Resources Bahlil Lahadalia explained that a series of B50 trials on various engines and vehicles have yielded positive results. The government is currently coordinating to ensure the readiness of distribution infrastructure before the policy is officially rolled out widely. “Technically, trials have been carried out by our ESDM team led by the Director General of New, Renewable Energy and Energy Conservation, Prof Eniya, and the results are very encouraging. To date, the water content comparison between B40 and B50 shows that B50 has a lower water content,” he said when met at the Coordinating Ministry for Economic Affairs office in Jakarta, quoted on Tuesday (23/6/2026). The government has conducted B50 testing across six sectors to guarantee operational reliability in the field. These sectors include land transportation, railways, sea transportation, as well as heavy equipment in the mining industry and agricultural machinery. “And this has been tested on various vehicles, including heavy equipment, ships, trains, and several other vehicles. Mining excavators, all agricultural equipment, have all been tested,” Bahlil continued. With the inauguration of this high-level palm oil blend policy, Indonesia is projected to no longer require diesel supplies from the global market. The government is committed to shifting the burden of energy imports to products that can be fully produced independently by the domestic industry. Regarding the price, Director General of New, Renewable Energy and Energy Conservation Eniya Listia previously mentioned the B50 price but was unable to disclose the exact selling price of the new B50 fuel at petrol stations. She explained that the pricing for B50 will refer to existing regulations. The government will issue this benchmark price regularly every month to ensure certainty for both businesses and consumers. “It follows the formula. If it follows the formula, we issue the price every month,” she stated when met at the B50 Road Test Fuel Blending and Filling Station in Lembang, quoted on Monday (27/4/2026). Regarding the detailed calculation of the Biofuel component or Fatty Acid Methyl Ester, her party is currently coordinating with the Directorate General of Oil and Gas. “We are still calculating with the Directorate General of Oil and Gas because predictions until December need to be clarified, for example, there are savings and ongoing discussions regarding the oil,” she added. Based on ESDM data, the implementation of the B50 programme is projected to provide significant economic benefits for the country through increased added value of crude palm oil. From a fiscal perspective, the policy has the potential to save the state up to Rp 157.28 trillion in foreign exchange in 2026, an increase from the initial target of the B40 programme which was Rp 140 trillion. When asked about the readiness of raw material supplies for the July implementation, Eniya said, “Regarding the supply I mentioned earlier, we are still calculating, but I predict it will be sufficient, the FAME supply is sufficient.”