Indonesia Considers Early B45/B50 Biodiesel Implementation Amid Capacity and Supply Challenges

The Indonesian Government is evaluating an early rollout of B45/B50 biodiesel, contingent on successful automotive and train engine tests. Current biodiesel capacity stands at 22.05 million kL/year, sufficient for B50 implementation, increasing utilization rates. The new Balikpapan Refinery will play a crucial role in meeting diesel needs as imports are restricted. Pricing for biodiesel may require adjustments due to rising methanol costs. The sector outlook remains NEUTRAL with a CPO price estimate of MYR4,250/tonne for 2026.

Published Mar 24, 2026

Indonesia is contemplating an early rollout of B45/B50 biodiesel, depending on the outcomes of automotive and train engine tests set to complete by June and August, respectively. The country's biodiesel production capacity is 22.05 million kL/year, adequate for B50, raising utilization to 91%.

AI-curated by Theia

The new Balikpapan Refinery, with a diesel capacity of 360,000 bpd, will support local production as diesel imports are phased out post-2026. However, increasing methanol prices may affect biodiesel margins, necessitating a review of pricing mechanisms. The sector outlook remains NEUTRAL, with CPO price projections at MYR4,250/tonne for 2026.