Indonesia’s B50 Biodiesel Rollout Hinges on Crude Oil–Palm Oil Price Gap

Indonesia’s plan to launch its B50 biodiesel mandate will depend on the price spread between crude oil and crude palm oil (CPO), a senior official said on Tuesday. The country, the world’s largest palm oil producer, is targeting the second half of 2026 to raise the mandatory biodiesel blending rate to 50%, up from the current B40 requirement.

Indonesia funds its biodiesel program through palm oil export levies, with subsidies linked to the gap between fossil fuel prices and CPO prices. Coordinating Economic Affairs Minister Airlangga Hartarto said the president has instructed the government to maintain B40 price levels for now, while continuing to evaluate B50 and closely monitor market conditions.

On Tuesday, Malaysian CPO futures for February delivery traded at a premium of about USD 370 per tonne over ICE Brent diesel futures, wider than the roughly USD 300 per tonne premium seen in October and November last year.