Indonesia expands biofuel mandate, targeting B50 biodiesel and new ethanol plants for E20

Indonesia is implementing a mandatory B50 biodiesel blend from July 2026, requiring half of diesel to be produced from domestically sourced palm oil. The Ministry of Energy and Mineral Resources estimates the programme will save roughly Rp 170 trillion (≈US $10.8 billion) in foreign‑exchange outlays in 2026, create up to 2.1 million jobs and cut CO₂ emissions by about 44.5 million tonnes. The shift will increase domestic palm‑oil demand by roughly 3 million tonnes per year, raising total domestic consumption to around 26 million tonnes and limiting export availability to about 48 % of production, opening a window for Malaysia to capture a larger share of global palm‑oil trade.

President Prabowo Subianto announced a parallel push to develop bioethanol capacity, pledging to build at least 30 and possibly up to 50 new ethanol plants. The facilities will support the E20 gasoline programme, which mandates a 20 % ethanol blend, and aim to raise ethanol output from the current single plant to meet national targets. The plan cites India’s E20 and Brazil’s E100 programmes as benchmarks and is positioned as a core element of Indonesia’s broader energy‑self‑sufficiency strategy.