Indonesia may revive a plan to launch a mandatory B50 grade of palm oil-based biodiesel in the middle of this year because of surging crude oil prices due to the conflict in the Middle East, deputy energy minister Yuliot Tanjung said.
No decision has been made yet by Indonesia, the world’s largest palm oil producer, Yuliot added in comments sent to Reuters over the weekend.
In January, authorities scrapped a plan to launch B50 – a blend of 50% palm oil-based biodiesel and 50% conventional diesel – this year due to technical and funding concerns, instead sticking with a B40 blend.
In light of the U.S.-Israeli war on Iran, however, the government is now looking at two scenarios, Yuliot said.
“B50 might be implemented in the second semester or even earlier…But for now the steering committee’s decision for B40 until the end of 2026 still stands,” he said, adding that authorities were monitoring price movements in real time.
The steering committee consists of several ministries which determine biodiesel policy, led by chief economic minister, Airlangga Hartarto.
Indonesia’s biodiesel mandate often affects global palm oil prices as increased domestic use reduces available exports.
