by Setyawati Fitrianggraeni and Tiara Amanda Putri
Overview
The Indonesian Government officially issued Minister of Energy and Mineral Resources Decree No. 113.K/EK.05/MEM.E/2026 as a strategic measure to strengthen national energy independence and accelerate the transition toward Net Zero Emissions (NZE) by 2060.(1) This regulation responds to global geopolitical dynamics and the surge in global oil prices, which have reached USD100 per barrel,(2) and directly threaten domestic energy security due to Indonesia’s 20–25 percent dependence on imported petroleum fuels.(3)
The decree was issued under Minister of Energy and Mineral Resources Regulation No. 4 of 2025(1) which governs the biofuel business chain from supply to distribution, as well as the active involvement of state-owned enterprises such as Pertamina in balancing food-grade and fuel-grade needs. Cross-sector collaboration involving GAIKINDO (Gabungan Industri Kendaraan Bermotor Indonesia) and APJETI (Asosiasi Pengumpul Minyak Jelantah untuk Energi Terbarukan Indonesia) ensures that each blending stage remains adaptive to vehicle technology characteristics while promoting a circular economy through the use of alternative feedstocks such as used cooking oil.(2)
Key Highlights
- Establishment of Mandatory Biodiesel Blending Targets Toward B50
The Government has set a minimum mandatory biodiesel blending target in diesel fuel for all fuel business entities operating nationwide. This is implemented through a mandatory 40% blending requirement (B40) in 2026, which will be gradually increased to 50% (B50) during the 2027–2030 period for both subsidized and non-subsidized diesel fuel.(4) This process is carried out by optimizing domestic Crude Palm Oil (CPO) production to reduce greenhouse gas emissions and decrease dependence on imported diesel fuel, which is highly vulnerable to disruptions in global supply chains.(5)
- Expansion of Regional Utilization of Bioethanol, Biohydrocarbon, and Bioavtur
The program requires blending bioethanol, biohydrocarbon diesel, and bioavtur into transportation fuels to promote cleaner energy use.(1) Fuel business entities are required to meet a 5% bioethanol target in 2026 in priority regions such as East Java and Jakarta, which will increase to 10% nationwide by 2028, while bioavtur implementation will begin at 1% in major airports such as Soekarno-Hatta and I Gusti Ngurah Rai.(4) This phased implementation is supported by research and development efforts to utilize sugarcane molasses,(2) sorghum, and cassava as feedstocks for bio-based gasoline in order to maintain sustainable energy supplies without disrupting food security.(3)
- Volume Allocation, Certification Mechanisms, and Incentive Support
The Minister of Energy and Mineral Resources determines the annual biofuel allocation volume for each fuel business entity by considering technical parameters, quality standards (specifications), and the availability of supporting infrastructure in each region.(4) The implementation of this obligation involves strict oversight of the production value chain through certification mechanisms to ensure environmental sustainability.(1) The subsidized sector (PSO) receives dedicated financial support.(1) Through coordination with the Palm Oil Plantation Fund Management Agency (Badan Pengelola Dana Perkebunan Kelapa Sawit /BPDPKS), the Government provides price differential incentives between biodiesel and diesel fuel to maintain the competitiveness of biofuels amid fluctuations in global vegetable oil and crude oil prices.(5)
References
1. The Minister of Energy and Mineral Resources. Media Center ESDM. 2026. Menuju B50, Pemerintah Susun Tahapan Pemanfaatan BBN. Available from: https://www.esdm.go.id/id/media-center/arsip-berita/menuju-b50-pemerintah-susun-tahapan-pemanfaatan-bbn
2. Jatmiko BP. Kompas.com. 2026. Pertamina Lirik Tebu jadi Bahan Baku Bensin Nabati . Available from: https://lestari.kompas.com/read/2026/04/16/212943286/pertamina-lirik-tebu-jadi-bahan-baku-bensin-nabati
3. Grehenson G. Universitas Gajah Mada. 2026. Harga Minyak Dunia Naik, Pemerintah Diminta Genjot Pemanfaatan Bahan Bakar Nabati. Available from: https://ugm.ac.id/id/berita/harga-minyak-dunia-naik-pemerintah-diminta-genjot-pemanfaatan-bahan-bakar-nabati/
4. Decree of the Minister of Energy and Mineral Resources No. 113.K/EK.05/MEM.E/2026 on the Phased Utilization of Biofuels.
5. Paminto A, Koestoer RHS, Karuniasa M, Frimawaty E. Komparasi Kebijakan Pengembangan Bahan Bakar Nabati di Indonesia dan Kolombia: Dilema Antara Pasar, Kapasitas Produksi dan Daya Serap. Matra Pembaruan. 2022 May 31;6(1):43–55. doi:10.21787/mp.6.1.2022.43-55
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