TEMPO.CO, Jakarta - Energy and Mineral Resources Minister Bahlil Lahadalia claims that the mandatory B50 biodiesel program will keep hundreds of trillions of rupiah in foreign exchange within Indonesia. The initiative is projected to conserve the foreign currency reserves spent on importing diesel fuel.
The B50 scheme mandates a 50 percent blend of crude palm oil into diesel fuel sold domestically. Bahlil believes the program will not only slash diesel imports but also create a reliable domestic market for crude palm oil (CPO).
"If the CPO price drops and foreign markets reject it, we will allocate a portion to develop our downstream sector through B50," he said during the program's launch alongside President Prabowo Subianto in Karawang, West Java, on Thursday, July 9, 2026.
With the B50 rollout, the Golkar Party chairperson is convinced that palm oil prices will rise for both farmers and the industry. Domestic CPO demand is estimated to surge from 15.2 million tons to as much as 17 million tons. This newfound demand, he noted, will provide market certainty for palm oil farmers.
As a result, Bahlil said more foreign exchange would be retained within the domestic economy. Thus, capital will stop flowing out of the country to fund diesel imports.
Bahlil stated that the B50 program would retain up to Rp170 trillion at home. This figure represents an increase from the preceding B40 program, which he previously noted kept around Rp133 trillion within the country.
Furthermore, Bahlil expects the added value of the CPO industry to experience a significant boost. He projects that this value will rise from Rp20.92 trillion to Rp23.49 trillion. In terms of employment, Bahlil claims that workforce absorption will climb from around 1.8 million people under the B40 mandate to 2.1 million people under the B50 scheme.
The government also asserts that B50 will help meet national greenhouse gas emission reduction targets. Bahlil mentioned that carbon emission reductions could expand from 39.66 million tons of CO2 to around 44.46 million tons of CO2 through the mandatory program.
Bahlil stated that this policy will effectively end Indonesia’s reliance on foreign diesel. "With the implementation of B50, thank God, we will no longer import diesel products into our country," he said.
The legal framework for the mandatory B50 program relies on Minister of Energy and Mineral Resources Regulation No. 4/2025 regarding the Development and Utilization of Biofuels. This is supported by Minister of Energy and Mineral Resources Decree No. 257.K/EK.01/MEM.E/2026, which outlines the obligation to mix a 50 percent biodiesel blend into diesel oil.
The policy mandates a 50 percent biodiesel blend for all types of diesel fuel distributed. Under its enforcement, biofuel producers, fuel companies, and distributors are required to meet strict quality and standard specifications.
Energy firms that fail to meet the blending requirements, or biofuel companies that fail to distribute biodiesel in line with the 50 percent target, face administrative sanctions ranging from written warnings and temporary suspensions to the revocation of business licenses under existing regulations.
To ease the transition, fuel companies have been granted a grace period until September 30, 2026, to clear out their remaining B40 inventory. The Ministry of Energy and Mineral Resources will conduct periodic evaluations of the B50 rollout every three months.
Ervana Trikarinaputri contributed to this article
Read: Prabowo Hails Indonesia as First to Adopt B50 Biodiesel
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