Indonesia’s government is still evaluating whether to proceed with a planned B50 biodiesel mandate for 2027, the Director General of New, Renewable Energy and Energy Conservation (EBTKE) at the Ministry of Energy and Mineral Resources, Eniya Listiani Dewi, said on Thursday (12/11) at the Indonesian Palm Oil Conference (IPOC) 2026 in Bali.
A special meeting on the mandate is planned for the following week. “I still have one month,” Eniya said, adding that no decision has yet been made on the 2027 blending level. She said implementation next year must also review technical readiness, adequacy of raw material supply, and financial risk mitigation.
Biodiesel volumes this year
Biodiesel distributed for the Biosolar fuel blend reached 13.84 million kiloliters through November 2026, out of a total 2026 allocation of 16.75 million kiloliters. That represents 83 percent of the full-year allocation already distributed with roughly a month still to run.
Economist Achmad Nur Hidayat of UPN Veteran Jakarta said simulations show that a rigid B50 mandate without an adjustment mechanism could avoid 46.82 million kiloliters of diesel imports between 2027 and 2030. But the same rigidity, he said, could constrain palm oil export volume to around 26.16 million tons by 2030, while export levy funds managed by the state’s plantation fund body, Badan Pengelola Dana Perkebunan (BPDP), would no longer suffice to cover incentive costs, risking a funding deficit.
Subsidy costs in question
Simulations put the BPDP biodiesel incentive requirement at between 12.7 trillion rupiah and 47.2 trillion rupiah, assuming an exchange rate of 18,154 rupiah per US dollar. In dollar terms this ranges from 700 million dollars at the lower end to 2.6 billion dollars at the upper end, under Brent crude price scenarios running from 100 down to 70 dollars a barrel.
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Teuku Muhammad Riefky Hasan of LPEM FEB UI said biodiesel reference prices follow crude palm oil prices rather than crude oil. Volumes, he said, are set by government mandate, so BPDP must cover the difference between biodiesel and diesel prices multiplied by the volume distributed. Lower crude oil prices widen that gap, raising the subsidy burden.
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Source: Ministry of Energy and Mineral Resources
