Indonesia prepares to launch B50 biodiesel program from July 1

Indonesia is preparing to launch its B50 biodiesel program on July 1, which will increase the share of palm-based biofeedstock in diesel fuel to 50% from the current 40%. According to the energy ministry, fuel tests have already been successfully completed and confirmed readiness for large-scale implementation.

The move is part of Indonesia’s policy to reduce dependence on imported diesel fuel. The government expects that a blended scheme — B40 in the first half of the year and B50 in the second — will reduce fuel import costs to 157.28 trillion rupiah (≈ $8.89 billion).

For comparison, maintaining the current B40 scheme throughout the year would result in savings of about 139.8 trillion rupiah (≈ $7.90 billion). This means that raising the biodiesel blend to B50 delivers an additional economic benefit of nearly 17.5 trillion rupiah (≈ $0.99 billion).

Separately, the government notes that the new program will also reduce subsidy spending. In 2026, subsidies are projected to fall to 32 trillion rupiah (≈ $1.81 billion), down from 47 trillion rupiah (≈ $2.66 billion), despite higher biodiesel consumption.

The program is financed through export levies on palm oil, which help cover the price gap between conventional diesel and biofuel. From January to May, the BPDP fund collected 17.4 trillion rupiah (≈ $0.98 billion), representing about 64% of its annual target.

Following the rollout of B50, biodiesel demand is expected to rise to 17.6 million kiloliters, strengthening Indonesia’s position as one of the world’s largest producers and consumers of biofuels.