Indonesia to stop diesel imports as it shifts to 50% biodiesel blend: Minister

Indonesia will stop importing subsidized low-grade diesel fuel from July 1 as the government enforces its mandatory B50 biodiesel program, Agriculture Minister Andi Amran Sulaiman said April 19.

"We will no longer import Solar starting July 1, when B50 takes effect. This is Indonesia's future energy because the source comes from palm oil," Amran told reporters at the Sepuluh Nopember Institute of Technology graduation ceremony in Surabaya.

Solar is the Indonesian name for subsidized automotive diesel fuel used mainly for public transport and small vehicles.

Indonesia is the world's largest palm oil producer and supplier, followed by Malaysia, and currently has a 40% biodiesel mandate, also known as B40.

The country has been fast-tracking biofuel mandates in the interest of energy security in 2026, as its energy subsidy bill has surged in the past month due to the ongoing war in the Middle East.

Finance Minister Purbaya Yudhi Sadewa had estimated at the start of April that up to Rupiah 100 trillion ​($5.9 billion) of additional energy subsidies would be needed this year due ‌to the impact of the Iran war.

In 2025, diesel imports are projected to reach 4.9 million kiloliters, or roughly 10.6% of national demand, according to government data.

Meanwhile, Indonesia's biodiesel consumption rose to 14.2 million kiloliters in 2025, up from 9.3 million kiloliters in 2021, data from the government and biodiesel trade body APROBI showed.

Indonesia's palm oil association, Gapki, said April 1 that demand for palm oil as a biodiesel feedstock is expected to reach about 15 million mt this year, up 2 million mt year over year.

The B50 blending mandate is expected to reduce fossil diesel consumption by around 4 million kiloliters annually, Coordinating Minister for Economic Affairs Airlangga Hartarto had said in March.

Production capacity increases

In a separate televised interview on April 19, Unggul Priyanto, a member of the National Energy Council's Technology Stakeholder Committee, said Indonesia's biodiesel production capacity is 22 billion liters per year. Demand for B50 is 19 million kiloliters.

Indonesia's biodiesel capacity should rise to 24 million kiloliters to cover maintenance downtime. However, vehicles may need additional filters and slightly higher fuel volumes under the new blend, Priyanto said April 19.

Platts, part of S&P Global Energy, assessed UCOME FOB Straits at $1,300/mt on April 20, up 4% since the start of March.