The Indonesian government is preparing to implement the B50 biodiesel mandate by early 2026 as part of its broader strategy to enhance downstream processing and energy security, said Deputy Minister of Energy and Mineral Resources (ESDM) Yuliot Tanjung.

He cited that the current implementation of the B40 program − both for the Public Service Obligation (PSO) and non-PSO sectors − has been running smoothly. The government is now conducting a thorough evaluation, including the availability of feedstock and the readiness of domestic Fatty Acid Methyl Ester (FAME) producers, to ensure a smooth transition to B50.

“We are getting ready to move to B50 next year. Hopefully, we can set it from the beginning of the year,” Yuliot said on Friday, May 16, 2025.

He noted that domestic industries are increasingly ready to support the B50 rollout. Many FAME producers have increased investments and secured their feedstock supplies. Importantly, the transition to B50 will not require expansion of plantation land, although the move to B60 may necessitate additional land − depending on the outcome of the government’s ongoing replanting programs.

To support the expansion, the government will rely on funding from the Indonesia Oil Palm Plantation Fund Management Agency (BPDPKS), with a planned increase in export levies from 7.4 percent to 10 percent. This is expected to accelerate the development of both B50 and B60 programs.

In addition to biodiesel, the government is also fast-tracking the development of domestically produced bioethanol. A major integrated sugarcane and bioethanol project is underway in Merauke, South Papua, where plantations are already being developed and equipment orders for processing facilities have begun.

“When the milling season arrives, the industry will be operational and ready to produce bioethanol,” Yuliot said, stressing the importance of aligning feedstock availability with supportive government policy.

He also acknowledged the high import duties on ethanol, which are often based on the misconception that ethanol is solely for alcoholic beverages. The Ministry of Energy is coordinating with the Ministry of Finance and Customs Office to clarify these differences and simplify import procedures for ethanol used as fuel.

“We are working to simplify the procedures for companies and to ensure ethanol used as fuel is exempt from excise duties,” he said.