Indonesian biodiesel blend rate of 50% takes effect

Indonesia's 50% biodiesel mandate went into effect on Wednesday. It requires a fuel mix of half palm-based diesel with conventional diesel, known as B50. This is even though stakeholders are still waiting for a revised allocation of biodiesel from the government. Indonesia, in an effort to reach energy independence, increased the mandated blend rate from 40% to 50%, effective July 1, In the face of declining crude oil prices, and high palm oil prices, which are typically higher than diesel prices, Indonesia increased its mandated blending rate to 50% from 40%, effective July 1.

Noor Arifin Muhammad, an official at the energy ministry, said via text that "B50 implementation is proceeding according to applicable regulations." According to a June decree, the government provided a 3-month transition period for fuel retailers to clear B40 stock. However, now that retailers are required to blend biodiesel with higher-quality palm-based oil diesel from producers.

The new standard has a lower water content, and a longer oxidation stabilization than B40.

The government has not announced how much palm-based fuel producers will have to supply to retailers in order to make B50. The ministry had allocated 15,64 million kilolitres to the B40 mandate that was initially planned "throughout 2026".

"The new allocation isn't available yet." Catra DeThouars, vice-chair of the Indonesian Biofuel Producers Association said that yesterday we met with the energy minister and they said that it was still in preparation. "For the time being, we are still using our old allocation."

Data from the Energy Ministry shows that between January and April 4,61 million kilolitres (or biodiesel) were distributed.

(source: Reuters)