B40 Biodiesel Saves Rp 59 Trillion in Foreign Exchange, Ministry Prepares Price-Cutting Rules
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JAKARTA, Investortrust.id — The government has reported that Indonesia’s mandatory B40 biodiesel program has saved the country US$ 3.68 billion, equivalent to around Rp 59.8 trillion, in foreign exchange during the first half of 2025, while advancing its energy transition goals.
The Ministry of Energy and Mineral Resources (ESDM) is drafting new regulations aimed at making B40 biodiesel prices more affordable in the domestic market. Minister of Energy and Mineral Resources Bahlil Lahadalia said domestic consumption of B40 biodiesel reached 6.8 million kiloliters (KL) in the January–June period, or 50.4% of the 2025 target of 13.5 million KL.
“This is B40 biodiesel. Our target for 2025 is 13.5 million KL, and we have already reached 6.8 million KL, which is 50.4%. God willing, we will achieve the target,” Bahlil said on Tuesday, Aug 12, 2025.
B40 is a biodiesel blend containing 40% fatty acid methyl ester (FAME) derived from palm oil mixed with diesel fuel. Indonesia began implementing the B40 mandate in early 2025. According to Bahlil, the upcoming regulation is expected to help industries adopt B40 at competitive prices, reduce carbon emissions, and accelerate the energy transition.
“We are looking for a formula so that industrial companies can use B40 at affordable prices,” said Bahlil, who previously served as Minister of Investment.
Currently, biodiesel is classified into public service obligation (PSO) and non-PSO categories. Non-PSO allocations, typically used by industrial players, do not receive government subsidies, making them more expensive. PSO biodiesel prices are partially covered by the Palm Oil Plantation Fund Management Agency (BPDPKS).
Director General of New, Renewable Energy and Energy Conservation (EBTKE) at ESDM Eniya Listiani Dewi said price disparities remain in different parts of the country. “Some industrial companies buying non-PSO B40 pay up to Rp 24,000, while others pay around Rp 12,000,” she said.
Eniya added that the ministry is working with other government agencies to develop a new pricing formula to prevent market manipulation and narrow price gaps. “Imagine a Rp 12,000 price difference. We are discussing how to address this,” she said.
Indonesia has relied on imports in recent years to meet demand for automotive diesel (HS 27101971) and industrial diesel (HS 27101972). In 2024 alone, the country imported US$ 5.15 billion worth of diesel fuel, contributing to a widening trade deficit.
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