Official: B50 Biodiesel Mandate Takes Effect 1 July 2026, Here Are the Rules

The government has officially enforced the mandatory policy of blending 50% palm oil-based biodiesel (B50) into diesel fuel, effective today, Wednesday, 1 July 2026. This is stipulated in the Decree of the Minister of Energy and Mineral Resources (ESDM) Number 257.K/EK.01/MEM.E/2026 concerning the Obligation to Blend 50% Biodiesel with Diesel Fuel within the Financing Framework by the Plantation Fund Management Agency. The regulation was enacted and signed by Minister of Energy and Mineral Resources Bahlil Lahadalia on 17 June 2026 and takes effect from 1 July 2026. “This Ministerial Decree comes into effect on 1 July 2026, with the provision that if any errors are found in the future, corrections will be made accordingly in line with the provisions of the legislation,” the regulation stated. However, the government will provide a three-month transition period before the full implementation of the B50 biodiesel mandate. There are several key points in the ESDM Ministerial Decree No. 257.K/2026. The main points are: First, to accelerate the implementation of the government’s policy on blending biodiesel with diesel fuel, a minimum implementation target of 50% is set, applicable to all types of diesel fuel. Second, in carrying out the blending, biofuel business entities, distributor business entities, and fuel business entities are required to apply the standards and quality specifications for biodiesel as listed in the Appendix, which is an integral part of this Ministerial Decree. Third, the standards and quality specifications apply to biodiesel for blending with diesel fuel at 50%. Fourth, biofuel business entities, distributor business entities, and fuel business entities must maintain the quality of the blended biodiesel in accordance with the specified standards and quality. Fifth, the utilisation of biodiesel as a blend for certain types of diesel fuel is subject to incentive provisions through the financing framework by the Plantation Fund Management Agency in accordance with the policies of the Plantation Fund Management Steering Committee. Sixth, if a fuel business entity fails to fulfil the blending obligation or a biofuel business entity fails to fulfil the distribution obligation according to the minimum implementation target percentage, administrative sanctions will be imposed in the form of a written warning, temporary suspension, and/or revocation of business permits in accordance with the provisions of the legislation. Seventh, biofuel business entities and fuel business entities must make the necessary preparations for the utilisation and blending. Eighth, the Minister will evaluate the implementation of the biodiesel blending every three months. Ninth, upon the enactment of this Ministerial Decree, fuel business entities that still have B40 biodiesel blend stocks may distribute them until 30 September 2026 according to the previously established standards and quality specifications. The Director General of New, Renewable Energy, and Energy Conservation Decree regarding B40 specifications remains valid until that date. The previous ministerial decree regarding the 40% blend is revoked and declared invalid. Tenth, this Ministerial Decree comes into effect on 1 July 2026, with the provision that if any errors are found, corrections will be made accordingly.