Indonesia delays B50 biodiesel mandate, maintains B40 and raises palm oil export levy
Wednesday, January 14 2026 - 10:36 PM WIB
The Indonesian government has postponed the implementation of the B50 biodiesel mandate and will maintain the current B40 blending requirement through the end of 2026, citing technical, fiscal, and market considerations.
Deputy Minister of Energy and Mineral Resources (ESDM) Yuliot Tanjung said on Wednesday (Jan. 14) that the government has decided to keep the B40 mandate in place until the end of 2026. Indonesia had previously planned to introduce B50—comprising 50% palm oil-based biodiesel and 50% conventional diesel—in the second half of 2026.
Coordinating Minister for Economic Affairs Airlangga Hartarto said on Tuesday that the rollout of B50 would depend on the price spread between crude oil and crude palm oil (CPO). He said that under current market conditions, President Prabowo Subianto has directed the government to maintain B40 in 2026 while continuing preparations for a potential B50 implementation.
Read also: B40 biodiesel consumption exceeds target in 2025, cuts diesel imports
In parallel with the biodiesel decision, the government will raise palm oil export levies. The Palm Oil Plantation Fund Management Agency (BPDPKS) announced that the export levy on CPO will increase from 10% to 12.5% starting March 2026. Levies on other palm oil products will also be raised by 2.5 percentage points.
Indonesia’s biodiesel policy has a direct impact on global palm oil markets, as higher domestic blending mandates reduce export availability. Following reports of the B50 delay, benchmark Malaysian palm oil prices trimmed earlier gains and traded largely flat.
The Ministry of ESDM previously estimated that a B50 mandate would require around 20.1 million kiloliters of palm oil-based biodiesel annually, compared with an estimated 15.6 million kiloliters under B40. Domestic biodiesel consumption in 2025, the first year of B40 implementation, reached about 14.2 million kiloliters, according to ESDM data.
Indonesia is the world’s largest producer of palm oil, and changes to its biodiesel mandate and export levy structure are closely watched by energy and commodity markets.
Editing by Alexander Ginting