Observer: Government Must Anticipate B50 Biodiesel Supply Chain Availability

Executive Director of the Center for Energy Security Studies (CESS) Ali Ahmudi Achyak has stated that the government needs to anticipate the sustainability of the raw material supply chain for B50 biodiesel. “Going forward, the biggest challenge is no longer the B50 blending itself, but rather how to guarantee biodiesel supply, strengthen distribution, manage procurement mechanisms, and maintain product quality across the entire supply chain,” Ali said in a statement received in Jakarta on Monday. Ali explained that the increase in biodiesel composition from B40 to B50 is not merely a nominal 10 percent rise. In terms of volume, he said, this addition provides a significant reduction in diesel consumption, potentially suppressing imports of fuel oil which Indonesia still requires. According to Ali, the experience of implementing B20, B30, and B40 serves as important capital for the adoption of B50. Based on his observations at various fuel terminals and biodiesel producer facilities in Indonesia, he assessed that the readiness of blending infrastructure is already quite good. Nevertheless, Ali cautioned that the success of B50 is determined not only by the readiness of distribution infrastructure but also by the sustainability of the biodiesel supply chain. He hopes the government will ensure the availability of supporting raw materials for biodiesel production, such as methanol and other chemicals, which are important components in processing palm oil into biodiesel. Ali assessed that the government needs to start anticipating the high utilisation rate of national biodiesel plants, which has currently reached more than 80 percent. This condition makes the room for increasing production increasingly limited, so the development of new plant capacity and the reallocation of production need to be prepared early on. Besides ensuring supply adequacy, Ali highlighted the importance of improving the distribution system so that biodiesel logistics costs can be reduced. According to him, a more efficient distribution pattern will keep biodiesel prices competitive while maintaining product quality until it reaches the public. “If managed well, B50 will become an important foundation in the national energy diversification strategy towards energy independence,” said Ali. Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia stated that the government will build methanol industries in East Java and East Kalimantan to meet the needs of B50 biodiesel. Bahlil said the government will conduct the groundbreaking for the methanol industry development in Bojonegoro, East Java, in July 2026. The methanol industry to be built in Bojonegoro will use gas as raw material. Furthermore, the government will also build a methanol industry in East Kalimantan using coal as raw material. He thus hopes that Indonesia can meet its methanol needs for the B50 programme.