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Indonesia strengthens energy security with B50 biodiesel rollout

The B50 biofuel mandate would significantly reduce Indonesia's reliance on imported petroleum products. The country currently consumes around 39 million kilolitres of diesel annually, and increasing the biodiesel blend to 50% is expected to meet a substantial share of domestic demand.

Jakarta (VNA) – Indonesia will officially launch its mandatory B50 biodiesel programme on July 1, requiring a fuel blend of 50% palm oil-based biodiesel and 50% conventional diesel. The policy marks a major step toward eliminating diesel imports this year while strengthening national energy security and boosting the value of the country's palm oil industry.

Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia said the B50 mandate would significantly reduce Indonesia's reliance on imported petroleum products. The country currently consumes around 39 million kilolitres of diesel annually, and increasing the biodiesel blend to 50% is expected to meet a substantial share of domestic demand.

Energy economist Fahmy Radhi of Gadjah Mada University said the transition to B50 will proceed smoothly, as it is built on the existing B40 programme. He noted that the Indonesian Automotive Industry Association has completed technical assessments confirming that B50 is fully compatible, particularly with newer vehicle models designed to operate on blended fuels.

From a broader economic perspective, Eddy Abdurrachman, President Director of the Palm Oil Plantation Fund Management Agency (BPDP), described the biodiesel programme as both an energy security measure and a driver of economic growth.

According to data from the Ministry of Energy and Mineral Resources, between 2015 and 2025 the programme helped Indonesia save 722.9 trillion IDR (approximately 44.4 billion USD) in foreign exchange, generated 114.7 trillion IDR in added value through crude palm oil processing, supported the livelihoods of around 10.9 million workers, and reduced carbon dioxide emissions by 228.41 million tonnes.

To ensure a sustainable supply of feedstock for the B50 programme, BPDP pledged to continue supporting upstream initiatives, including its Smallholder Palm Oil Replanting (PSR) scheme, human resource development, and research and innovation.

Experts, however, cautioned that pricing remains the biggest challenge. Bisman Bhaktiar, Executive Director of the Energy and Mining Law Research Centre, said B50 must be priced competitively to encourage consumer adoption.

He suggested that retail prices should remain well below those of premium Pertadex fuel, currently priced at 24,800 IDR per litre, while staying above the subsidised diesel price of 6,800 IDR per litre.

​A balanced pricing strategy, he added, would help build public confidence in the new fuel while preventing misuse of state-subsidised diesel./.

​

VNA
#Indonesia #B50 biodiesel #energy Indonesia
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