ESDM Decree 257/2026 Issued: B50 Mandatory From 1 July, B40 Stock Allowed Until 30 September

Jakarta — Energy and Mineral Resources Minister Bahlil Lahadalia has issued ESDM Ministerial Decree No. 257.K/EK.01/MEM.E/2026, which requires a 50% biodiesel blend (B50) in all diesel fuel from 1 July 2026. The decree, enacted on 17 June 2026, gives existing B40 stock a transition period until 30 September 2026 and threatens non-compliant companies with sanctions up to the revocation of business permits.

The regulation, reported by detikFinance on Tuesday, 30 June 2026, provides the legal basis for the decision announced by Coordinating Minister for Economic Affairs Airlangga Hartarto on 31 March 2026. At that time, according to ANTARA, the government said B50 would take effect on 1 July 2026, claiming subsidy savings of around IDR 48 trillion.

Key provisions of Decree 257/2026

Based on the provisions detailed by detikFinance, the decree's main points are:

• Blend target: at least 50% biodiesel for all types of diesel fuel.
• Quality standards: biofuel producers (BU BBN), distributors and fuel companies must meet the B50 standards and specifications set by the government. An annex lists 24 test parameters biodiesel must meet before blending.
• Sanctions: biofuel producers that fail to supply biodiesel as required may face written warnings, temporary suspension and/or revocation of business permits.
• Evaluation: the ESDM Minister will evaluate the programme every three months.
• Transition: fuel companies still holding 40% blend stock may distribute it until 30 September 2026, provided it meets the earlier specifications.
• Revocation: the earlier 40% blending provisions under the plantation fund financing framework cease to apply once this decree takes effect.
• Effective date: 1 July 2026, with a clause allowing corrections should errors be found later.

Tighter specifications, applied to all sectors at once

Ahead of the decree, EBTKE Director General Eniya Listiani Dewi told CNBC Indonesia that all stakeholders had agreed on B50 quality standards. Data presented in that report put maximum water content at 300 ppm, maximum monoglyceride content at 0.47% by mass and minimum oxidation stability at 900 minutes. For heavy equipment needs, Eniya said the water content specification had been lowered by 20 ppm, which producers accepted.

Eniya also explained that the regulatory framework consists of two ministerial decrees: one on the mandate itself, and another on volume allocation for the second half of 2026, coordinated with the Directorate General of Oil and Gas. Decree 257/2026 is the one on the mandate.

The rollout is not phased by sector. In late April, Eniya told detikFinance that all sectors — including motor vehicles, mining heavy equipment and railways — would switch to B50 simultaneously. She also said B50 could potentially be cheaper than B40 because FAME prices were then well below diesel, but stressed this was not guaranteed as prices are set monthly.

Realisation and projections

CNBC Indonesia reported that biodiesel distribution reached 3.90 million kL by mid-April 2026, about 24.9% of the initial 2026 allocation of 15.65 million kL. The Ministry of Energy and Mineral Resources (ESDM) projects that B50 could save up to IDR 157.28 trillion in foreign exchange, employ more than 2.2 million workers and cut greenhouse gas emissions by 46.72 million tonnes of CO2 in 2026. These figures are projections.

Automotive road tests were targeted for completion in June 2026, while heavy equipment and railway testing will be completed in stages by year-end, according to CNBC Indonesia. Under the decree's transition provision, B40 Biosolar may remain on sale until 30 September 2026. Biodiesel quality parameters are explained on the glossary page.