Indonesia official says launch of B50 biodiesel depends on crude oil, palm oil prices
Airlangga Hartarto, Indonesia's chief economic affairs minister, gestures as he speaks during an interview with Reuters at his office in Jakarta, Indonesia, August 26, 2025. REUTERS/Willy Kurniawan
JAKARTA, Jan 13 : The launch of Indonesia's B50 biodiesel mandate will depend on the price gap between crude oil and crude palm oil, a senior official said on Tuesday.
Indonesia, the world's largest producer of palm oil, previously said it would start its B50 mandate, which requires a 50-50 blend of palm-based fuel and diesel, in the second half of 2026. The current mandate calls for biodiesel that is 40 per cent palm-based.
The country subsidises its biodiesel programme using proceeds from palm oil export levies. The size of the subsidy depends on the difference between crude oil and crude palm oil prices.
"This year, the guidance from the president is to maintain B40," said Airlangga Hartarto, the coordinating minister for economic affairs. "For B50, reviews are being continuously conducted and we must monitor the difference between crude oil and crude palm oil prices."
"We are preparing for (implementation) in the second semester, however under current price conditions, the president's directive is (to maintain) B40, but be ready for B50," he added.
On Tuesday, Malaysian crude palm oil futures for February delivery had a premium of about $370 per metric ton over ICE Brent gasoil futures for February delivery, widening from a premium of about $300 in October and November last year.
Indonesia's energy ministry allocated 15.65 million kilolitres of palm-based biodiesel for this year's mandate, of which 7.45 million kilolitres will be subsidised by the country's plantation fund.
Airlangga said tests are ongoing regarding the fuel's impact on automotive engines.
An official with the energy ministry previously said Indonesia would likely increase its palm oil export levy.
A decision on the export levy could come in a few days, Airlangga said.
