B50 Funding: BPDP's 2026 Biodiesel Incentive Revised to IDR 32 Trillion, Government Says Funds Secure

Jakarta — The Plantation Fund Management Agency (BPDP) and the government say funding for the B50 biodiesel mandate is secure, with 2026 incentive needs revised down from an initial projection of IDR 47 trillion to around IDR 32–32.3 trillion. Financing has been one of the biggest questions surrounding the programme since it took effect on 1 July 2026.

Incentive needs revised down

The Ministry of Energy and Mineral Resources (ESDM) initially estimated 2026 biodiesel incentive needs at around IDR 47 trillion. After oil prices spiked and the price gap between FAME-based biodiesel and fossil diesel narrowed, that projection was revised to around IDR 32 trillion to IDR 32.3 trillion. BPDP Director of Downstreaming Fund Disbursement Mochmad Alfansyah put this year's biodiesel mandate spending at about IDR 32.3 trillion, as reported by IDXChannel (15 July 2026).

According to KabarBursa (28 July 2026), BPDP had disbursed around IDR 17 trillion by the end of June 2026, more than half of the annual requirement. Needs for the second half, when B50 is in force, are estimated at IDR 10 trillion to IDR 15 trillion.

Where the money comes from

The funds come from export levies on CPO and its derivatives, not the state budget (APBN), under a principle described as "from palm to palm". The incentive is calculated from the difference between the biodiesel market index price (HIP) and the HIP for fossil diesel. When fossil diesel becomes more expensive, the gap covered by BPDP narrows; when biodiesel is more expensive, incentive needs grow. Under this scheme, the consumer price of B50 is said to remain at IDR 6,800 per litre.

KabarBursa put export levy revenue in the first half of 2026 at around IDR 21 trillion.

Other priorities and the government's stance

Alfansyah stressed that core programmes such as smallholder oil palm replanting, infrastructure, research and human resources will not be cut. BPDP is also preparing support for special-price non-subsidised diesel for fishers, with a quota of 400,000 kilolitres and an estimated cost of under IDR 1.5 trillion. In his view, raising export levy rates is not urgent for the rest of 2026, and next year's rate formula will be reviewed later.

On 28 July 2026, Energy and Mineral Resources Minister Bahlil Lahadalia said there were no problems at BPDP, including for B50, even with the Indonesian Crude Price (ICP) above US$90 per barrel. He also said the government is prioritising domestic needs before exports to safeguard CPO supply.

What still needs watching

The sources do not detail the risks if export levy revenue falls. The current CPO export levy rate is 12.5%. The latest HIP is available in October 2026 Biodiesel HIP.