Key facts
- Indonesia's Ministry of Energy and Mineral Resources (ESDM) has set production volume targets for domestic biodiesel producers.
Indonesia's Ministry of Energy and Mineral Resources has allocated 16.7 million kiloliters of production volume targets to 26 domestic biodiesel producers for 2026 to implement its 50% fossil diesel-biodiesel blend (B50) mandate.
The allocation of production volumes is critical for Indonesia's B50 mandate, which aims to increase the domestic consumption of biodiesel, thereby supporting the palm oil industry and reducing reliance on fossil fuels.
The Indonesian Ministry of Energy and Mineral Resources (ESDM) has finalized production volume targets for domestic biodiesel producers, aiming to implement the nation's 50% fossil diesel-biodiesel blend (B50) mandate for 2026. According to a document reviewed by Argus, a total of 16.7 million kiloliters (kl) has been allocated across 26 biodiesel producers, an increase from the 15.6 million kl initially planned for a B40 target earlier in the year.
Biodiesel producers had been anticipating these updated volume allocations throughout July, even as the B50 mandate officially commenced at the beginning of the month. Of the total allocated volume, 8.2 million kl is designated for the public service obligation (PSO) sector, which includes public transportation, agriculture, and micro-enterprises. The remaining 8.5 million kl is to be supplied to the non-PSO sector, encompassing commercial industries, private transport, mining, manufacturing, and power plants.
The Indonesian plantation fund management agency BPDPKS plays a crucial role in subsidizing the price difference between biodiesel and fossil gasoil for the PSO sector. This funding is derived from export levies on palm oil and related products. BPDPKS disburses these funds to biodiesel producers after they supply the blended fuel to distribution companies at the cost of regular gasoil, who then supply it to consumers.