JAKARTA, INDONESIA / RankWire.AI / – Indonesia’s mandatory B50 biodiesel programme is projected to save about 170 trillion rupiah, or US$10.8 billion, in foreign exchange during 2026, the Energy and Mineral Resources Ministry said. The estimate reflects lower spending on imported diesel after the country raised its national biodiesel blend. The programme requires diesel sold nationwide to contain 50% palm oil-based biodiesel. Officials said the policy increases domestic fuel use while reducing demand for fossil diesel.
Indonesia began nationwide B50 implementation on July 1 and formally launched the mandate on July 9 in Karawang, West Java. The new blend replaces B40, which contained 40% biodiesel and became the national standard in 2025. B50 combines equal shares of fatty acid methyl ester, known as FAME, and conventional diesel. Palm oil supplies the renewable component, linking the fuel programme to Indonesia’s domestic plantation and processing industries.
The ministry compared the Rp170 trillion estimate with Rp133.3 trillion in foreign exchange savings under B40. It also expects B50 to reduce fossil diesel use by about 4 million kilolitres. The government assigned state-owned Pertamina to operate the blending system and support distribution across the national fuel network. Fuel suppliers may use remaining B40 stocks through September as the market completes the shift to the higher blend.
B50 mandate expands palm-based fuel use
Indonesia expects B50 demand to require between 16.7 million and 18 million kilolitres of biodiesel. The programme will also use an estimated 15.2 million to 16.3 million tonnes of crude palm oil. Those volumes exceed the 15.64 million kilolitres allocated under the B40 programme for 2026. The higher mandate directs more locally produced palm oil into transport, industrial equipment, shipping, rail operations and power generation.
Government projections place the programme’s added value for the crude palm oil industry at 23.49 trillion rupiah. The official assessment also says B50 can support about 2.1 million jobs across farming, processing, logistics and fuel supply. The ministry estimates that the blend can cut carbon dioxide emissions by as much as 44.46 million tonnes. Its B40 comparison placed emissions reductions at 39.66 million tonnes.
Testing supports nationwide diesel transition
Before the rollout, the government tested B50 in cars, trucks, mining equipment, farm machinery, trains, ships and power plants. Automotive trials covered lighter vehicles over 50,000 kilometres and heavier vehicles over 40,000 kilometres. Mining equipment testing ran for about 1,000 operating hours and found no major engine problems tied to fuel quality. The ministry said the tested fuel met government specifications and vehicle manufacturers’ technical requirements.
Indonesia has raised its biodiesel requirement in stages for nearly two decades. The programme started with B2.5 in 2008, followed by B10 in 2013 and B20 in 2018. The government introduced B30 in 2020, B35 in 2023 and B40 in 2025 before moving to B50 this year. Authorities have paired each increase with updated fuel standards, production capacity, storage, transport and distribution preparations for nationwide use.