Indonesia sets 3-month transition period for B50 biodiesel program
Indonesia has issued a regulation to implement its B50 biodiesel mandate starting from July 1, with a three-month transition period for retailers to clear their existing stocks, a senior energy ministry official said on Thursday.
Here are some details:
- The launch of the B50 program on July 1 means that all gasoil sold in the country must contain 50% palm-based diesel and 50% conventional diesel.
- The program is a response to the oil supply disruptions that followed the attacks on Iran by the United States and Israel. The currently operating B40 policy stipulates that fuel must contain 40% palm-based diesel.
- The new B50 regulation, the details of which have not been made public, includes a three-month transition period to allow fuel retailers to clear out their existing stocks, said the director general of renewable energy, Eniya Listiani Dewi.
- Indonesia provides subsidies for its biodiesel mandate, using proceeds from a levy on palm oil exports, to bridge the gap between gasoil and palm-based diesel prices.
- "(State energy firm) Pertamina pledged to clear out their stocks within two months … but for smaller fuel retailers we are giving some adjustment: three months," Eniya said.
- Indonesia also plans to mix non-subsidized gasoline with at least 5% ethanol in Java, the country's most populated island, over the 2026-2027 period, and raise the proportion to 10% by 2028.
On Thursday, Energy Minister Bahlil Lahadalia told an energy forum that the biodiesel mandate "saves Indonesia's face from gasoil imports."
The biodiesel mandate for this year, a mix of B40 in the first six months and B50 from July to December, is estimated to save Indonesia around 157.28 trillion rupiah ($8.89 billion) in import costs, the energy ministry said, compared to an estimated 139.8 trillion rupiah saved if the B40 scheme was maintained over the whole year.
The ministry has yet to issue an additional biodiesel allocation for this year to meet rising demand from the B50 program. Under the B40 mandate, the ministry has allocated 15.64 million kiloliters.
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