Indonesia's B40 Biodiesel Program Started on 1 January 2025
Indonesian Energy and Mineral Resources Minister Bahlil Lahadalia confirmed in Indonesian media that, per 1 January 2025, the mandatory B40 biodiesel program was imposed across Indonesia. Earlier, there had been reports of delaying this stage of the country's biodiesel program as industry players might needed a transition period.
In the B40 stage of the biodiesel program, the palm oil-based content share in biodiesel is raised from 35 percent (B35), the stage that was previously imposed in January 2023, to 40 percent (B40) in the present. The remaining 60 percent of the blend consists of conventional diesel.
This palm oil content in the mix is called Fatty Acid Methyl Ester (FAME), a compound that can be derived from the process of transesterification of fatty acids in palm oil with methanol. Considering Indonesia is the world's leading palm oil producer, the country has easy access to FAME.
The biodiesel program is one of Indonesia’s strategies to switch to cleaner fuels (hoping to reach net zero emissions by 2060) as well as part of Indonesian President Prabowo Subianto's energy self-sufficiency ambition.
Energy and Mineral Resources Ministry official Eniya Listiani Dewi was quoted in state-owned news agency Antara saying that the B40 biodiesel program is estimated to save up to IDR 147.5 trillion (approx. USD $9.1 billion) in import costs (as Indonesia is a net oil -and fuel- importer). Moreover, the program gives added value to the country's palm oil industry. Lastly, the program is targeted to cut greenhouse gas emissions by up to 41.46 million tons of CO2.
For 2025, the Indonesian government set the quota for B40 biodiesel at 16.62 million kilolitres, a number that should be sufficient to meet domestic demand. Indonesia's state-owned energy giant Pertamina prepared two of its refineries to facilitate B40 biodiesel production: (1) Plaju in South Sumatra, which is targeted to produce 119,240 kilolitres per month, and (2) Kasim in West Papua, which is targeted to produce 15,898 kilolitres per month.
Meanwhile, the Indonesian government recently expressed its commitment to impose the B50 biodiesel program in 2026.