The Indonesian government has reassessed its plan to implement B50 biodiesel—a 50% blending ratio—in 2026. Instead, it has decided to maintain the B40 program, which blends 40% Fatty Acid Methyl Ester (FAME) derived from palm oil into diesel fuel. Through this decision, the government aims to preserve global palm oil supply stability while also reducing energy price volatility.
Technical Contribution of Biodiesel B40
So far, the B40 program has delivered tangible benefits to national energy security. First, it has reduced diesel fuel imports, eased pressure on foreign exchange reserves, and strengthened the downstream palm oil industry. At the same time, B40 supports the country’s green energy transition by lowering the carbon intensity of the transportation sector.
Technical Assessment of B50 Implementation
Previously, the government positioned B50 as the next step to increase the renewable fuel ratio and improve energy efficiency. However, B50 requires a significantly larger volume of FAME supply, which could disrupt the global commodity balance. Moreover, the government continues to evaluate fuel compatibility, engine durability, and the readiness of the fuel distribution infrastructure before increasing the biodiesel blending ratio.
At present, B40 has proven to be technically and economically stable. Meanwhile, the government has postponed the B50 decision due to challenges related to cost efficiency, supply chain readiness, and technical aspects of fuel technical constraints. As a result, policymakers are prioritizing national energy resilience while reinforcing the domestic value chain of the palm oil industry.
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