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NewsOils and Fats Sector Coverage

Indonesia eyes next step in biodiesel as cabinet weighs blend beyond B50

Fats and oils processing
September 17, 2026
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زيت النخيل أصبح وقودا لسيارات السباقات

Indonesian President Prabowo Subianto convened a limited cabinet meeting (ratas) at the Presidential Palace on Wednesday afternoon, just hours after inaugurating the Kelapa Gading to Manggarai light rail transit (LRT) route, with Energy and Mineral Resources Minister Bahlil Lahadalia indicating that the session would address steps to meet domestic energy needs and push fuel policy beyond the B50 biodiesel mandate launched in July.

Officials arriving at the palace around 16:00 local time included Agriculture Minister Andi Amran Sulaiman, Coordinating Minister for Food Affairs Zulkifli Hasan, Finance Minister Suahasil Nazara, head of the State-Owned Enterprises Regulatory Agency (BUMN) Dony Oskaria, Bank Indonesia Governor Destry Damayanti, and Investment Minister and Danantara chief Rosan Roeslani, according to the state news agency ANTARA.

'Today we will hold a meeting with the President regarding several steps to meet our domestic energy needs,' Bahlil told reporters before the session, adding that he would likely report on plans to develop and utilise domestic energy potential. 'We will push for fuel above B50,' he said, without specifying a blend level or timetable.

The remark extends a policy trajectory that has accelerated each year. Indonesia moved through B20 and B30 to B40, and launched B50, a 50 percent palm-oil biodiesel blend, at an event officiated by Prabowo at a rest area in Karawang on 9 July, after a transition semester that ran B40 in the first half of 2026. The Ministry of Energy and Mineral Resources (ESDM), through Prof. Eniya, Director General for New and Renewable Energy, had reported in June that tests on trucks, mining equipment, excavators, ships, trains and agricultural machines showed B50 performing well, with lower water content than B40.

The gap between the June test data and the July launch figures serves as a reminder that these are programme projections rather than audited outcomes, and Kontan noted that industry participants were still awaiting revised biodiesel allocations after the launch. ESDM also framed 2026 as a transition year with a total biodiesel allocation of about 17.60 million kilolitres across the B40 and B50 semesters. A blend above B50 would widen both the promised savings and the supply-chain questions, from crude palm oil (CPO) availability to engine and storage compatibility.

The presence of the finance minister, the central bank governor and the Danantara chief suggests that the discussion reached beyond fuel blending into financing, foreign exchange and state investment capacity, although no decisions were published by the time ANTARA filed. Bank Indonesia's involvement is consistent with the foreign-exchange-savings rationale that anchors the biodiesel programme, and Bahlil called the B50 launch a 'historic milestone' for energy sovereignty at the July event.

The food coordinator and agriculture minister tie the policy to its feedstock: every step up the blend ladder converts palm oil from export crop to domestic fuel, with consequences for CPO export volumes and for the food-versus-fuel debate that the government frames as energy sovereignty. Bahlil has consistently presented the mandate as a sovereignty instrument rather than an environmental one, a framing that shapes which ministries sit at the table.

What the Wednesday ratas did not produce was a published decision. The measurable next steps remain the revised allocations, any announcement of a blend above B50, and import data showing whether the 18 million kilolitre target survives contact with demand. Until those appear, the meeting signals direction rather than delivery.

Source: Streamline Feed / ANTARA