These Two Regulations Become the New Foundation for Biofuel Development
The Ministry of Energy and Mineral Resources (ESDM) is preparing a new framework to accelerate the development of biofuels. This regulation serves as the foundation for a more measured mandatory biofuel policy, including targets to increase blending up to B50.
The government has established two main rules: Ministerial Decree No. 113.K/EK.05/MEM.E/2026 on the Phasing of BBN Utilisation and Minister of ESDM Regulation No. 4 of 2025 on BBN Business and Utilisation. Both regulations aim to strengthen energy independence, increase the renewable energy mix, and reduce energy imports.
Director General of New, Renewable Energy, and Energy Conservation Eniya Listiani Dewi stated that strengthening regulations is necessary to ensure biofuel implementation proceeds realistically in line with national readiness.
“Through more comprehensive regulations and clear phasing, we aim to ensure that BBN utilisation can be implemented optimally, while still considering the readiness of raw materials, infrastructure, and industry support,” said Eniya.
Eniya explained that biofuels play a strategic role in the national energy system, not only to reduce emissions but also to strengthen the domestic energy base. Their utilisation is seen as capable of driving domestic resource-based industries while reducing reliance on energy imports.
In this scheme, mandatory biofuel implementation will be carried out gradually, considering the availability of raw materials, infrastructure readiness, financing support, and user sector readiness. This approach is expected to maintain supply stability and not disrupt field operations.
The Ministerial Decree on BBN phasing serves as a strategic reference for biofuel blending in petroleum fuels. This rule also provides certainty for investments and biofuel industry development, including for the public service sector.
Meanwhile, Minister of ESDM Regulation No. 4 of 2025 regulates the BBN business chain comprehensively, from provision to distribution and end utilisation. This regulation also covers pricing, business entity obligations, technical aspects, safety, environment, incentives, and carbon economic value.
BBN utilisation phasing not only covers biodiesel but also bioethanol, biohydrocarbon diesel, and biojet fuel. All will be implemented gradually according to the needs of national energy sector development.
Representative of the Indonesian Automotive Industry Association Abdul Rahim stated that industry support for biofuels still considers vehicle technology readiness.
“We support the utilisation of biofuels as a strategic step to strengthen national energy resilience, while paying attention to the suitability with the diverse characteristics of vehicle technology in Indonesia,” said Abdul.
Representative of the Indonesian Used Cooking Oil Collectors Association for Renewable Energy Matias Tumanggor stated that this policy opens opportunities for utilising used cooking oil as an energy raw material.
“The BBN utilisation policy provides great opportunities for utilising used cooking oil as a raw material for biodiesel and biojet fuel, while also encouraging the development of a circular economy in the energy sector,” said Matias.
The government views these regulations as the initial foundation to strengthen the national biofuel ecosystem. Their implementation is expected to encourage cross-sector collaboration in supporting the energy transition towards the 2060 net zero emissions target.