Indonesia allocates 15.65 MM kiloliters of biodiesel for 2026
Indonesia Energy and Mineral Resources Ministry has signed a decree to allocate 15.65 MM kiloliters (kl) of palm-based biodiesel for its fuel blending mandate in 2026, an official with the ministry said on Tuesday.
Of the total allocation, 7.45 MMkl have been earmarked for the public service obligation (PSO), which covers sectors such as public transportation and whose sales will be subsidized by the country's palm oil fund.
The non-PSO allocation, which will be sold at the market price, is set at 8.20 MMkl, said Eniya Listiani Dewi from the Energy and Mineral Resources Ministry.
Indonesia allocated 15.6 MMkl of palm oil fuel for 2025, only slightly lower than next year.
The Southeast Asian country has implemented a mandatory palm oil blend of 40% for diesel, and is planning to increase the share to 50% starting from next year, as part of its efforts to reduce its reliance on imported fossil fuels.
Indonesia started road tests for the "B50" blend in early December and they are expected to last around six months. Energy minister Bahlil Lahadalia has reiterated that the mandatory use of B50 will likely begin in the second half of 2026.
The plan to implement B50 may require up to 19 MMkl of palm oil fuel per year, biodiesel producers group APROBI has said.
"This will happen if the road test results are OK and the availability of raw materials is sufficient," Ernest Gunawan, APROBI's secretary general said.
"A revision of the ministerial decree (for the) quantity will be carried out in the second semester to adjust to the needs of B50," he added.
Indonesia's palm oil stocks at the end of October fell 10% from a month earlier to 2.33 MM tonnes (t), despite an increase in production.
Domestic consumption rose by 8.5% to 2.22 MMt, driven by rising demand for biodiesel and food consumption.
Indonesia, the world's biggest producer of palm oil, may regulate exports of crude palm oil to ensure there is enough domestic supply to produce the biodiesel.
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