Indonesia Sets Ambitious 2026 Biodiesel Targets to Enhance Energy Security

Strategic Allocation for National Energy Resilience

The Indonesian government, through the Ministry of Energy and Mineral Resources (ESDM), has officially determined the 2026 biodiesel allocation at 15.646 million kiloliters. This comprehensive policy is part of the national mandatory biodiesel program and energy resilience strategy. The allocation is divided into two main categories: 7.454 million KL for Public Service Obligation (PSO) and 8.192 million KL for non-PSO.

Economic and Environmental Impact

The biodiesel program is projected to have significant economic and environmental benefits. It is expected to create Rp21.8 trillion in added value from crude palm oil (CPO) processing into biodiesel. Additionally, the program could result in foreign exchange savings of Rp139 trillion from reduced diesel imports. The initiative is also anticipated to support over 1.9 million jobs and contribute to a reduction of 41.5 million tons CO2e in greenhouse gas emissions.

Implementation and Oversight

To ensure the effective implementation of the biodiesel program, the government will engage 32 fuel companies and 26 biodiesel producers. The Ministry of ESDM will maintain strict monitoring of biodiesel quality standards, distribution oversight at delivery points, and involve independent surveyors to verify the volume and quality of biodiesel supplied to consumers. This comprehensive oversight aims to optimize the implementation of the Biodiesel 40% (B40) program and maximize its benefits for all stakeholders.

Future Policy Adjustments

The government remains open to adjusting the mandatory biodiesel policy in the future if necessary, based on changing national strategic needs and allocation targets. This flexibility will allow for adaptive management of the energy sector in response to evolving circumstances.