Jakarta: Indonesia will implement its B50 biodiesel programme from July 1, 2026, increasing the biodiesel blending requirement to 50 per cent as part of its strategy to strengthen energy security, reduce dependence on imported fossil fuels and expand the value addition of domestic palm oil production.
The move marks the next phase of the country’s palm oil-based biofuel programme following earlier biodiesel blending initiatives implemented over the past several years.
Under the policy, the government aims to increase the use of renewable fuel derived from domestic resources while supporting the long-term development of Indonesia’s palm oil sector, VOI reported.
According to government data, the biodiesel programme implemented between 2015 and 2025 generated foreign exchange savings of IDR 722.9 trillion by reducing diesel imports. During the same period, processing crude palm oil (CPO) into biodiesel created added value of IDR 114.7 trillion, supported employment for up to 10.9 million people in the palm oil sector and contributed to reducing greenhouse gas emissions by 228.41 million tonnes of COâ‚‚.
The government said these outcomes demonstrate that biodiesel has evolved beyond an energy policy and is increasingly contributing to industrial development, economic growth and employment generation.
BPDP President Director Eddy Abdurrachman said the rollout of B50 reflects continued alignment between national energy goals and efforts to strengthen a productive and sustainable palm oil industry.
He said the biodiesel programme has become an important tool for enhancing national energy resilience while creating a stronger domestic market for Indonesian palm-based products. According to him, the transition to B50 reflects the government’s commitment to increasing the share of renewable energy sourced within the country.
Officials also linked the programme’s expansion to efforts aimed at strengthening the upstream palm oil sector.
BPDP stated that alongside supporting biodiesel implementation, it continues to run programmes focused on increasing productivity, improving sustainability and enhancing competitiveness across the palm oil value chain.
These initiatives include the People’s Palm Oil Replanting (PSR) programme, human resource development, support for research and innovation and strengthening plantation infrastructure.
Through the replanting programme, unproductive plantations are being replaced with higher-yielding varieties to improve output. At the same time, research initiatives are supporting innovation in productivity, efficiency, product quality and downstream development.
Authorities said research-backed improvements have become increasingly important in addressing industry challenges including productivity growth, climate adaptation and development of new palm-based products.
Human resource development remains another priority through training, education and scholarship programmes designed to strengthen technical capabilities across the plantation sector.
The government also plans continued investment in plantation facilities and infrastructure to improve efficiency and strengthen governance across the sector.
BPDP said it will continue supporting implementation of the palm-based biofuel programme through sustainable and accountable fund management while backing broader government efforts to expand renewable energy and strengthen the competitiveness of Indonesia’s palm oil industry.
The government said the long-term objective remains to deliver stronger economic outcomes while supporting farmer welfare and advancing national energy goals.
