Indonesia Biodiesel Glossary: B50, FAME, HIP, BPDP & More

A

APROBI (Indonesian Biofuel Producers Association) (APROBI): APROBI (Indonesian Biofuel Producers Association) is the association of Indonesian biodiesel and bioethanol producers and a partner of the government in the biofuel mandate.

B

B-number (B40, B50…) (B-number): A B-number such as B40 or B50 states the percentage of biodiesel (FAME) in a blend with diesel; B50 means 50% biodiesel and 50% fossil diesel.
B40: B40 is a blend of 40% biodiesel and 60% diesel that Indonesia mandated from 1 January 2025 under Energy Ministry Decree 341.K/EK.01/MEM.E/2024, before B50 replaced it.
B50: B50 is a blend of at least 50% biodiesel and 50% diesel, mandatory in Indonesia since 1 July 2026 under Energy Ministry Decree 257.K/EK.01/MEM.E/2026.
B60: B60 is a proposed blend of 60% biofuel in diesel that the Energy Ministry is studying at the President's direction; no regulation sets it yet.
Biodiesel: Biodiesel is a liquid biofuel made of fatty acid methyl esters (FAME) from vegetable oils or fats, blended with diesel fuel for diesel engines.
Biodiesel allocation (allocation decree): Biodiesel allocation is the division of biodiesel volume (kilolitres) among producers and fuel companies, set annually by the Energy Ministry through a ministerial decree.
Biodiesel HIP (Market Index Price) (HIP): Biodiesel HIP is the monthly Market Index Price for biodiesel set by the Energy Ministry as the basis for paying for biodiesel; October 2026 is IDR 15,072 per litre.
Biodiesel incentive (HIP gap): The biodiesel incentive is funding that BPDP pays producers to cover the gap between biodiesel HIP and diesel HIP, keeping the Biosolar price affordable.
Biodiesel mandate: The biodiesel mandate is the government requirement that diesel sold domestically be blended with a minimum percentage of biodiesel, now 50% (B50) since 1 July 2026.
Bioethanol (E5, E10) (E5/E10): Bioethanol is alcohol made from sugarcane, cassava or corn and blended into gasoline; E5 means 5% ethanol and E10 means 10% ethanol in the blend.
Biofuel business entity (BU BBN) (BU BBN): A biofuel business entity (BU BBN) is a company producing biodiesel or bioethanol that the government appoints to supply biofuel volumes under the mandate.
Biosolar: Biosolar is Pertamina's subsidised diesel (a designated fuel type) containing biodiesel per the mandate, now B50, with a retail price of IDR 6,800 per litre.
BPDP (formerly BPDPKS) (BPDP): BPDP (Plantation Fund Management Agency, formerly BPDPKS) is a Finance Ministry public service agency that manages palm export levy funds for biodiesel incentives, replanting, research and other programmes.

C

Cetane number (CN): Cetane number measures how readily diesel fuel ignites in an engine; the higher the number, the better the ignition. B50 is available in CN 48 and CN 51 grades.
Co-processing: Co-processing is refining vegetable oil or other renewable feedstock together with crude oil in an existing refinery to produce fuel with renewable content, without building a new plant.
Cold-flow properties (cloud point, CFPP) (CFPP): Cold-flow properties describe how well fuel flows at low temperature, measured by cloud point and CFPP among others; palm-rich biodiesel tends to gel more easily.
CPO (Crude Palm Oil) (CPO): CPO (Crude Palm Oil) is the unrefined oil pressed from the flesh of oil palm fruit, the main feedstock for FAME biodiesel and cooking oil in Indonesia.
CPO Reference Price (HR): The CPO Reference Price is the monthly benchmark set by the Trade Ministry to calculate export duty and export levy; October 2026 is US$1,042.15 per MT.

D

Degraded land: Degraded land is land that has lost forest cover or productivity, now proposed by the government as a feedstock source for biodiesel so that primary forest is not cleared.
Dexlite / non-subsidised diesel: Dexlite is Pertamina's non-subsidised diesel with a higher cetane number than Biosolar; as of 1 October 2026 it costs IDR 23,700 per litre and Pertamina Dex IDR 25,200.
Diesel HIP (Market Index Price for diesel) (HIP solar): Diesel HIP is the government-set Market Index Price of fossil diesel, compared with biodiesel HIP to calculate the size of the biodiesel incentive.
Directorate General of EBTKE (EBTKE): The Directorate General of EBTKE (New, Renewable Energy and Energy Conservation) is the Energy Ministry unit that sets biodiesel HIP and runs the biofuel mandate programme.

E

Energy Ministry Decree (Kepmen ESDM) (Kepmen): A Kepmen ESDM is a decree of the Minister of Energy and Mineral Resources, the instrument used to set biodiesel blend levels, allocations, HIP and phasing.
EUDR (EU Deforestation Regulation) (EUDR): The EUDR (EU Deforestation Regulation) bars commodities including palm oil from the EU market if linked to deforestation or illegal production; its application has been postponed.

F

FAME (Fatty Acid Methyl Ester) (FAME): FAME (Fatty Acid Methyl Ester) is the chemical compound that makes up first-generation biodiesel, blended into diesel under Indonesia's B40 and B50 programmes.
FFB (Fresh Fruit Bunches) (TBS): FFB (Fresh Fruit Bunches) are the harvested oil palm fruit clusters that mills process into CPO and palm kernel; their price is set periodically by province.
Fuel business entity (BU BBM) (BU BBM): A fuel business entity (BU BBM) is a company licensed to trade fuel, such as Pertamina Patra Niaga, that blends biodiesel with diesel and distributes it to consumers.

G

GAPKI (Indonesian Palm Oil Association) (GAPKI): GAPKI (Indonesian Palm Oil Association) is the association of Indonesian palm oil businesses that releases national data on palm oil production, consumption and exports.
Glycerol (glycerine): Glycerol is the by-product of biodiesel production formed during transesterification, which can be purified for cosmetics, pharmaceuticals, food and other industries.

H

HVO (Hydrotreated Vegetable Oil) / green diesel (HVO): HVO (Hydrotreated Vegetable Oil), also called green diesel or renewable diesel, is a hydrocarbon fuel made by hydrotreating vegetable oil, chemically close to fossil diesel and usable without engine modification.

I

ICDX (Indonesia Commodity and Derivatives Exchange) (ICDX): ICDX (Indonesia Commodity and Derivatives Exchange) is an Indonesian commodity and derivatives exchange that trades, among other products, CPO futures.
ISPO (Indonesian Sustainable Palm Oil) (ISPO): ISPO (Indonesian Sustainable Palm Oil) is the Indonesian government's palm oil sustainability certification system, mandatory for oil palm plantation businesses.

K

KPBN (Kharisma Pemasaran Bersama Nusantara) (KPBN): KPBN (PT Kharisma Pemasaran Bersama Nusantara) is Indonesia's domestic physical auction market for CPO and palm kernel, whose prices are a reference for many transactions and calculations.

M

Methanol: Methanol is a simple alcohol reacted with vegetable oil in transesterification to make FAME biodiesel.
Monoglycerides: Monoglycerides are leftover compounds from an incomplete reaction in biodiesel; high levels can crystallise at low temperature and clog filters. The reported B50 limit is 0.47% by mass.
MPOB (Malaysian Palm Oil Board) (MPOB): MPOB (Malaysian Palm Oil Board) is the Malaysian government agency for the palm industry that publishes monthly data on Malaysian palm oil production, stocks and exports.

O

Oxidation stability: Oxidation stability is biodiesel's resistance to oxidation during storage; for B50 the requirement was reported to rise to 900 minutes from 720 minutes.

P

Palm oil DMO (Domestic Market Obligation) (DMO): Palm oil DMO (Domestic Market Obligation) is the requirement for suppliers to prioritise CPO or cooking oil supply to the domestic market before exporting.
Palm oil export duty: Palm oil export duty is a tax on exports of CPO and derivatives whose rate follows the reference price; for October 2026 it is US$178 per MT (September US$148).
Palm oil export levy: The palm oil export levy is a charge on exports of CPO and derivatives managed by BPDP; the CPO rate is 12.5% of the reference price under PMK 9/2026, and 7.25% for FAME biodiesel.
Palm oil mill (PKS) (PKS): A palm oil mill (PKS, Pabrik Kelapa Sawit) is a plant that processes fresh fruit bunches into crude palm oil (CPO) and palm kernel.
PSO / non-PSO (PSO): PSO (Public Service Obligation) is the subsidised distribution segment, such as Biosolar for public services; non-PSO is the commercial segment such as industry, mining and private transport.

R

RED II / RED III (Renewable Energy Directive) (RED): The RED (Renewable Energy Directive) is the EU directive on renewable energy; RED II and RED III contain biofuel sustainability criteria that affect palm biodiesel exports.
Replanting / PSR (smallholder palm replanting) (PSR): PSR (Peremajaan Sawit Rakyat) is the programme to replace old or unproductive smallholder palms with high-yielding seedlings, funded by BPDP.
Road test: A road test trials a biodiesel blend in real vehicles and engines before the blend level is raised, to confirm performance and durability.
RSPO (Roundtable on Sustainable Palm Oil) (RSPO): RSPO (Roundtable on Sustainable Palm Oil) is a global multi-stakeholder organisation that sets a voluntary standard and certification for sustainable palm oil.

S

SAF (Sustainable Aviation Fuel) / bio-jet (SAF): SAF (Sustainable Aviation Fuel), or bio-jet fuel, is aircraft fuel from renewable sources blended with fossil jet fuel to reduce aviation emissions.
SNI 7182:2024 (SNI): SNI 7182:2024 is the Indonesian National Standard for biodiesel that serves as the quality specification reference, including for the B50 programme.

T

Transesterification: Transesterification is the chemical reaction between triglycerides (vegetable oil) and an alcohol, usually methanol, with a catalyst, producing methyl esters (FAME) and glycerol.

U

Used cooking oil (UCO) (UCO): Used cooking oil (UCO) is spent frying oil that can serve as feedstock for biodiesel, HVO and SAF.

W

Water content & sludge: Water content and sludge are biodiesel cleanliness parameters; water promotes microbes, corrosion and sediment (sludge) that clog filters. The reported water limit for B50 is a maximum of 300 ppm.