Indonesia is considering reviving plans to introduce a mandatory B50 biodiesel blend as global oil prices surge above $100 per barrel amid escalating tensions in the Middle East. The move could expand the country’s use of palm oil–based biodiesel in the fuel mix.
The proposed policy would increase the share of biodiesel in diesel fuel to 50%. Indonesia currently operates with a lower blending mandate, but authorities may raise the target if high oil prices persist. Deputy Energy Minister Yuliot Tanjung said the government is closely monitoring developments in energy markets before making a final decision.
As the world’s largest producer of palm oil, Indonesia’s biodiesel policy has a strong influence on global palm oil markets. Expanding the mandate could significantly increase domestic consumption and reduce the volume of palm oil available for export.
Officials are also considering accelerating other biofuel initiatives, including plans to expand ethanol blending in gasoline. Such measures aim to reduce reliance on imported fuels and strengthen the country’s energy security.
Rising geopolitical tensions in the Middle East continue to fuel volatility in global energy markets. Potential disruptions to oil shipments through key routes such as the Strait of Hormuz could keep energy prices elevated and further encourage the development of alternative fuels.
