Jakarta. Indonesia will proceed with the nationwide implementation of its B50 biodiesel program on July 1 after completing road trials for both light and heavy vehicles, government officials said on Wednesday.

The B50 program will require diesel fuel to contain a 50% blend of palm oil-based biofuel.

Road testing for heavy vehicles covering a total distance of 40,000 kilometers has been completed with stable results, while trials for light vehicles concluded this month without major problems, according to Zuhdi Eka Nurrakhman of the Plantation Fund Management Agency (BPDP), the state agency responsible for financing the biodiesel program.

Testing for maritime transportation is expected to finish by the end of this month, while trials for railway applications are targeted for completion in October 2026.

Zuhdi, who heads BPDP’s biofuel distribution division, said 99.88% of tested fuel samples met the maximum water-content requirement of 320 parts per million.

Starting in July, allocation for B50 blended fuel is set at 10.23 million kiloliters through BPDP and another 9.47 million kiloliters through retail fuel distributors.

“The B50 program is a solution when the world faces an energy crisis,” Zuhdi said during a biofuel webinar in Jakarta.

Indonesia has gradually increased mandatory biodiesel blending levels in recent years.

Under the B35 program in 2024, biodiesel distribution reached 13.14 million kiloliters. After the blend was raised to B40, biodiesel distribution in 2025 increased further to 14.7 million kiloliters.

However, Zuhdi acknowledged that the B50 rollout, which began as a project in December 2025, still faces several challenges, including limited production capacity and the need to upgrade infrastructure such as ports, transportation systems, and storage tanks.

He also noted that when global crude oil prices are relatively low, biofuel becomes more expensive than fossil fuel, requiring substantial government incentives to sustain production.

BPDP is currently facing a deficit because global oil prices have risen above $100 per barrel, increasing the cost of supplying fossil fuel components for the B50 blend, Zuhdi said.

The agency’s revenue comes primarily from export levies on plantation commodities.

According to internal studies, financing the B50 program under normal market conditions would require export levies to rise to 23.8%, compared with the current rate of 12.5%, he added.

Speaking during the same webinar, Ani Rahayuni Ratna Dewi from the Ministry of Agriculture said biodiesel feedstock availability is becoming increasingly challenging because average palm oil productivity remains only around 3.8 tons per hectare annually.

Government data show Indonesia’s annual B50 demand is projected at 20.1 million kiloliters, requiring approximately 18.7 million tons of crude palm oil.

By 2028, biodiesel demand is expected to increase to 21.3 million kiloliters, with crude palm oil requirements reaching around 19.8 million tons.

“From the domestic production side, crude palm oil supply is sufficient, but it will indeed affect export volumes,” Ani said.

She added that Indonesia must continue increasing palm oil productivity to maintain a balance between food needs, exports, and biodiesel demand.