Jakarta: Indonesia plans to stop importing diesel fuel in 2026 as the government accelerates its biodiesel programme and expands domestic refinery capacity, a major move aimed at strengthening energy security and reducing dependence on foreign fuel, reports Ujyaalonepal.
A central part of this plan is the nationwide launch of B50, a diesel blend containing 50% palm-oil-based biodiesel. The government expects to begin introducing B50 in the second half of 2026, building on its long-running biodiesel mandate and marking its most ambitious shift so far toward renewable energy.
Energy and Mineral Resources Minister Bahlil Lahadalia said the combination of the B50 rollout and refinery improvements positions the country to stop diesel imports next year. He told local media that Indonesia is moving ahead with the B50 mandate and preparing to open the Balikpapan Refinery Development Master Plan (RDMP), with both efforts supporting the 2026 target.
The Balikpapan RDMP, one of the country’s largest downstream energy projects, is key to the transition. Once fully completed, it will raise refinery capacity by 100,000 barrels per day to 360,000 barrels per day. The facility is operated by PT Kilang Pertamina Balikpapan, a subsidiary of PT Kilang Pertamina International. The added capacity is expected to lift domestic fuel production, cut diesel import needs and improve national fuel security.
Indonesia has long depended on imported diesel for transport, power generation and industry, and has worked for years to reduce this reliance, especially during periods of high global oil prices.
The shift to B50 will further advance the use of biodiesel made from fatty-acid methyl ester (FAME), largely sourced from crude palm oil. Palm oil, one of Indonesia’s key export commodities, plays a significant role in supporting farmer incomes, strengthening downstream industries and diversifying the national energy mix.
Government data shows the biodiesel programme saved Indonesia 673.73 trillion rupiah (about 40.7 billion U.S. dollars) in foreign exchange between 2020 and 2025 by lowering fossil diesel imports and boosting domestic palm-oil use. It has also generated employment across plantation and processing sectors.
Lahadalia said the economic benefits will grow further once B50 is fully implemented. In 2026 alone, the policy is expected to save 179.28 trillion rupiah (around 10.84 billion U.S. dollars) in foreign exchange.
Indonesia currently applies a nationwide B40 mandate. Moving to B50 will place the country among the world’s leading users of high-blend biodiesel and strengthen its position as a major producer of palm-based renewable energy.
