Jakarta: Indonesia’s plan to roll out its B50 biodiesel mandate will depend on the gap between crude oil prices and crude palm oil prices, a senior government official said on Tuesday, reports Reuters.
Indonesia, the world’s largest palm oil producer, has earlier said it aims to introduce the B50 programme in the second half of 2026. The mandate would require biodiesel to contain 50% palm-based fuel, up from the current B40 requirement, which mandates a 40% blend.
The country supports its biodiesel programme through subsidies funded by palm oil export levies. The level of subsidy is determined by the price difference between crude oil and crude palm oil, with a wider gap increasing the cost of the programme.
Coordinating Minister for Economic Affairs Airlangga Hartarto said the government’s current focus is on maintaining the existing B40 mandate. He said the B50 plan is under continuous review and its timing will depend on market conditions, particularly movements in crude oil and palm oil prices.
He added that preparations for introducing B50 are ongoing and that the government wants to be ready to implement it in the second half of the year if conditions allow. However, he said the current direction is to continue with B40 while closely monitoring price trends.
On Tuesday, Malaysian crude palm oil futures for February delivery were trading at a premium of about $370 per metric tonne over ICE Brent gasoil futures for the same month. This premium has widened from around $300 per tonne seen in October and November last year.
For 2026, Indonesia’s energy ministry has allocated 15.65 million kilolitres of palm-based biodiesel under the mandate, with 7.45 million kilolitres set to receive subsidies from the country’s plantation fund.
Airlangga said testing is still underway to assess the impact of higher biodiesel blends on vehicle engines. Separately, an energy ministry official had earlier indicated that Indonesia may raise its palm oil export levy to support the programme.
Airlangga said a decision on changes to the export levy could be announced within the next few days.
