Indonesia Sets 2026 Biodiesel Allocation at 15.65 Million kL for B40, PSO Share Cut to 7.45 Million

Jakarta — The Ministry of Energy and Mineral Resources (ESDM) has set Indonesia's 2026 biodiesel allocation at 15,646,372 kL, or 15.65 million kL when rounded, for the B40 mandate. The figure is set out in ESDM Ministerial Decree No. 439.K/EK.01/MEM.E/2025, announced on Tuesday, 23 December 2025. Of the total, 7,454,600 kL goes to the public service obligation (PSO) segment and 8,191,772 kL to non-PSO users.

The decree also designates the fuel companies (BU BBM) and biofuel producers (BU BBN) that will blend biodiesel into diesel throughout 2026. According to ESDM, next year's programme is backed by 32 fuel companies and 26 biofuel producers appointed by the government.

PSO incentive scheme retained

EBTKE Director General Eniya Listiani Dewi said the government will keep the incentive scheme for the PSO segment, as in the previous year. This means the pattern in place since early 2025 continues: the biodiesel price gap for PSO volume is covered by plantation funds, while non-PSO volume is sold without incentives.

Compared with the 2025 allocation, the mix has shifted slightly. The comparison below is based on ESDM data (differences calculated by the editors):

Component	2025	2026	Change
PSO	7.55 million kL	7,454,600 kL	down about 95,400 kL
Non-PSO	8.07 million kL	8,191,772 kL	up about 121,800 kL
Total	15.62 million kL	15,646,372 kL	up about 26,400 kL
Biofuel producers	24	26	+2

Under the new mix, the share of volume eligible for incentives shrinks slightly, while the non-PSO share — which bears market prices without price-gap support — grows.

Tighter quality and distribution oversight

ESDM outlined several measures to safeguard B40 implementation in 2026, as also reported by InvestorTrust:

• strict monitoring of biodiesel quality standards;
• supervision of distribution at handover points;
• independent surveyors to verify the volume and quality of biodiesel delivered;
• allocations based on each company's capacity and performance.

The government also projects the programme's 2026 benefits: IDR 21.8 trillion in added value from processing CPO into biodiesel, IDR 139 trillion in foreign exchange savings on diesel imports, employment for more than 1.9 million people, and greenhouse gas reductions of around 41.5 million tonnes of CO2e. All of these are ministry projections.

Door left open for B50

Although the allocation is set for B40, ESDM stressed that the mandate can be adjusted if target volumes change in line with needs and national strategic policy. The clause matters because the government has previously signalled its intention to move to B50. In August 2025, Deputy Minister Yuliot Tanjung, quoted by ANTARA, confirmed that B50 would be implemented in 2026 and said he was optimistic it could start early in the year.

Technical preparations are also under way. In mid-November 2025, Eniya told the Indonesian Palm Oil Conference in Nusa Dua, Bali, as reported by Metro TV News, that B50 road tests were scheduled to begin in early December 2025 simultaneously across six sectors — automotive, agricultural machinery, generator sets, mining, railways and shipping — lasting two to eight months depending on the sector.

The 15.65 million kL allocation is therefore the baseline for early 2026, while the timing of B50 still depends on road test results and further government decisions. A list of biodiesel producers is available on the biodiesel producers page.