Indonesia Keeps B40 Mandate, Lines Up B50 as Oil Import Shield

JAKARTA, Investortrust.id — Indonesia maintains its mandatory B40 biodiesel program on Tuesday, Jan 13, 2026 in Jakarta while preparing a shift to B50 in the second half of 2026 as part of a broader strategy to cut oil imports, strengthen energy security, and reduce exposure to global fuel price volatility. The policy follows direct guidance from President Prabowo Subianto and is positioned as a key buffer against Indonesia’s persistent crude oil deficit.

Coordinating Economic Affairs Minister Airlangga Hartarto said the government would not rush the higher blend, stressing that B50 implementation depended on energy prices, palm oil markets, and ongoing technical evaluations.

“For this year, the President’s direction is clear, B40 remains in place,” Airlangga said, adding that studies toward B50 must continue on an ongoing basis.

He said the economic viability of biodiesel blends hinged on the price gap between petroleum fuels and crude palm oil, making fiscal and market conditions decisive factors.

“We always look at the price difference between fuel and palm oil, how wide the delta is,” Airlangga said, noting that automotive testing and technical assessments were still under way.

The government has set the second half of 2026 as the earliest window for B50 implementation, with readiness maintained even as current price scenarios favored retaining B40.

“We are preparing for the second semester, but under current conditions the direction is B40, while remaining ready for B50,” he said.

Officials say the existing B40 mandate has already delivered tangible gains, cutting carbon emissions by an estimated 42 million tons and saving roughly Rp 8 billion, equal to $500,000, by reducing diesel imports.

Those savings carry added significance as Indonesia continues to grapple with heavy dependence on imported oil, a structural weakness highlighted by the National Energy Council.

Secretary General Dadan Kusdiana said Indonesia’s energy security index stood at 7.0 out of 10, categorized as resilient but still vulnerable due to oil imports.

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“If measured from zero to ten, our energy security is at 7.0, which is resilient,” Dadan said, adding that resilience remained heavily influenced by imports, especially oil.

Indonesia consumes about 1.6 to 1.7 million barrels of oil per day, while domestic production is only around 605,000 barrels per day, leaving a shortfall of nearly one million barrels daily.

That gap forced Indonesia to import roughly 330 million barrels of oil in 2024 at a cost of Rp 776 trillion, a burden policymakers see biodiesel expansion as helping to ease.

Energy officials say higher biodiesel blends, alongside efforts to lift domestic oil output and strengthen power transmission networks, form a complementary strategy to reduce import reliance.

B50 trials are scheduled to conclude in the first half of 2026, with full rollout planned for the second half if technical and economic benchmarks are met.