Indonesia Mulls Reviving B50 Biodiesel Plan As Oil Prices Surge
09/03/2026 (Business Today Editorial) - Indonesia is considering reviving plans to introduce a B50 biodiesel mandate as surging crude oil prices driven by the Middle East conflict push the government to accelerate its biofuel strategy.
Reuters reported that Deputy Energy Minister Yuliot Tanjung said the world’s largest palm oil producer may roll out the B50 blend, comprising 50% palm oil-based biodiesel and 50% conventional diesel, in the second half of the year or even earlier, although no final decision has been made.
“B50 might be implemented in the second semester or even earlier,” he said, adding that the steering committee overseeing biodiesel policy is still maintaining the B40 mandate through end-2026 while monitoring global price movements.
The government had scrapped plans in January to introduce B50 in 2025, citing technical and funding concerns. However, the surge in oil prices following the Iran-Israel conflict escalation 2026 has prompted policymakers to revisit the plan.
Indonesia’s biodiesel mandates are closely watched by global commodity markets as higher domestic consumption of palm oil typically reduces export supply and supports prices.
Crude oil surged above US$100 per barrel on March 9, lifting palm oil prices on expectations that higher fossil fuel costs will boost demand for biodiesel feedstocks.
Meanwhile, Finance Minister Purbaya Yudhi Sadewa said the government is prepared to increase fuel subsidy allocations to cushion the impact of rising global oil prices.