JAKARTA, Thekabarnews.com—Indonesia’s Energy and Mineral Resources Ministry will officially implement the mandatory 50 percent biodiesel blending policy (B50) for diesel fuel as of 1 July 2026. Bahlil Lahadalia has confirmed the announcement.

The government’s long-term strategy to strengthen national energy security includes this policy as a major step. Moreover, it aims to reduce dependence on imported fossil fuels. The policy will also increase the domestic use of crude palm oil (CPO)-based biofuel.

The government is still running a series of technical trials with ships, trains, and heavy equipment to ensure the transition to B50 goes smoothly. Such caution is necessary to avoid causing engine problems. They want to address these issues before full implementation.

“The government wants to avoid technical disruptions, especially in the transportation and industrial sectors that depend heavily on diesel fuel performance,” said Bahlil Lahadalia.

Under the B50 program, diesel fuel will contain a 50 percent mix of biodiesel derived mainly from palm oil. This is an increase from the current lower blending requirement.

“If we find problems with the engines, we will make adjustments so that the policy remains effective and does not create operational disruption,” said Bahlil.

The government sees it as part of a wider effort to boost Indonesia’s energy independence. It is also intended to help its domestic palm oil industry.

The New Renewable Energy and Energy Conservation (EBTKE) director, Eniya Listiani Dewi, said that the B50 pricing will follow the official formula from the government. She added it will be announced monthly.

“It is important to give certainty to business players and consumers in the management of fuel costs and supply planning,” she said.

The B50 policy is expected to save Indonesia up to Rp157.28 trillion in foreign exchange in 2026. This is according to projections from the Energy and Mineral Resources Ministry.

This is much higher than the initial saving target of Rp140 trillion under the previous B40 biodiesel program.

The increase is the government’s expectation that higher biodiesel use will reduce diesel imports and improve the country’s trade balance.

The officials also see the policy as a way to create stronger added value for Indonesia’s palm oil sector. The benefits would be through increased domestic demand for CPO and the promotion of downstream industrialization.

Indonesia is still one of the world’s largest palm oil producers. Therefore, the biodiesel policy is a strategic issue not only for energy policy but also for agriculture, exports, and regional employment.

Successful execution hinges on technical preparedness, stable pricing, and consistent supply.

Industrial consumers, transport operators, and logistics companies will be watching closely the impact of the switch to B50 on machine performance and efficiency.

B50 is not only an economic policy but also a long-term plan of national resilience, the government said.

Indonesia is preparing for one of its most ambitious policy shifts in recent memory on biofuels. There is a July deadline for the change that could reshape both the energy and palm oil industries.

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