Indonesia is officially entering a new phase of its biofuel program. Starting July 1, 2026, diesel fuel in the country will be required to contain 50 percent palm oil-based biodiesel, known as B50, as part of the government’s effort to accelerate renewable energy adoption.
The mandate has been established by the Ministry of Energy and Mineral Resources (ESDM). However, motorists and businesses may not immediately see a full B50 composition at fuel stations because the government has granted a three-month transition period to allow existing B40 inventories to be fully utilized.
According to Eniya Listiani Dewi, Director General of New, Renewable Energy and Energy Conservation (EBTKE) at the ministry, the B50 mandate officially begins on July 1, while full implementation is expected to take place on October 1, 2026.
“As of July 1, we move to B50. The second point is the transition period. The transition period is set at three months. So, what does this transition period mean? First, it is to exhaust existing stocks,” Eniya said during CNBC Indonesia’s Energy Forum last week.
She explained that the transition period is necessary because refineries and blending facilities still hold B40 inventories. During this adjustment period, diesel fuel circulating in the market may have compositions that differ slightly but will remain above the B40 level as the blend gradually moves toward the 50 percent target.
“If there is still B40 available at refineries, and it is blended with B50, the specifications will certainly be slightly different, but it will definitely be above 40%. Therefore, we are providing a transition period for these specifications. It will remain above 40% and gradually move toward 50%,” she said.
The government has also determined the price of biodiesel for July 2026.
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The Directorate General of New, Renewable Energy and Energy Conservation set the Market Index Price (HIP) of biodiesel at Rp14,562 per liter, excluding transportation costs.
The calculation uses the formula: (Average KPB CPO Price + US$85 per ton) × 870 kg/m³ + transportation costs.
The average benchmark price of crude palm oil (CPO) during the period from May 25 to June 24, 2026, was Rp15,217 per kilogram. The conversion value for biodiesel feedstock was set at US$85 per metric ton, while the conversion factor from kilograms to liters was determined at 870 kg/m³.
Transportation costs follow Minister of Energy and Mineral Resources Decree No. 290.K/EK.05/MEM.E/2025. The exchange rate used in the calculation refers to Bank Indonesia’s average middle exchange rate between May 25 and June 24, 2026, which stood at Rp17,895 per US dollar.
The implementation of B50 is backed by Minister of Energy and Mineral Resources Decree No. 257.K/EK.01/MEM.E/2026 concerning the mandatory blending of biodiesel-based renewable fuel with diesel fuel at a ratio of 50 percent under a financing framework managed by the Palm Oil Plantation Fund Management Agency.
The regulation requires diesel fuel to contain a 50 percent biodiesel blend and officially came into force on July 1, 2026. The decree was signed by Energy and Mineral Resources Minister Bahlil Lahadalia on June 17, 2026.
“This Ministerial Decree shall come into effect on July 1, 2026, with the provision that if any errors are found in the future, corrections will be made as necessary in accordance with prevailing laws and regulations,” the decree states.
With the B50 mandate now in place, Indonesia is moving forward with one of its most ambitious biofuel policies, using palm oil-based biodiesel as a key component of its renewable energy transition while providing businesses time to adjust to the new fuel blend requirements.
