Jakarta. President Prabowo Subianto, who is now on a Tokyo trip, wants Indonesia to implement the mandatory B50-grade of its palm oil-based biodiesel, as the month-long Iran war stress-tests the world’s energy resilience.

Prabowo is on his first ever state visit to Tokyo. The retired army general kicked off his trip by meeting Japanese Emperor Naruhito and attending a business forum as Jakarta sought to bring home fresh commercial deals. In a televised speech, Prabowo briefed the Japanese investors on his energy directives, including plans to hike the palm oil content in its biodiesel.

“The geopolitical situation in the Middle East gives strategic uncertainty for the security of our energy," Prabowo said.

“We [Indonesia] are going in a big way to biofuel. We will produce this year diesel from palm oil. We are now increasing from 40% to 50% of our diesel from palm oil.”

The B50 policy means Indonesia will implement a blend of 50% palm-oil biodiesel, with the other half sourced from conventional diesel. A B40 mandate — indicating a 40% palm oil mixture — has been in place over the past year, and even helped Southeast Asia’s biggest economy to save Rp 130.2 trillion (approximately $7.7 billion) in foreign exchange throughout 2025. 

Indonesia has been eyeing plans to raise the blend after the Strait of Hormuz blockade takes a toll on global energy shipments. Iran — a country now at war with Israel and the US — has a stranglehold on the waterway that controls a quarter of the world’s seaborne oil trade. The Indonesian government even floated a plan to launch biodiesel with 60% palm oil blending rate when push comes to shove. 

The plan has rattled producers as they worry whether they can keep up with the biodiesel mandate without sacrificing exports. The Indonesian Palm Oil Association (Gapki) said the country would have to increase production beyond the current volume as output remains stagnant. Higher production should enable Jakarta to steer clear of sacrificing its foreign clients for local supply. To this day, Indonesia largely banks on palm oil export levies to run the biodiesel program.

“Our production is stagnant. Forcing [a higher biodiesel mix] will only undermine our export. The only solution is to boost output by improving productivity,” Gapki chair Eddy Martono recently told the press.

The tests for the B50 program are slated for completion in the second half of 2026.

Japan is one of Indonesia’s palm oil buyers, although it mainly orders from Malaysia. In January 2026, Japan's palm oil imports from Indonesia totaled 701 million yen or almost $4.4 million. Malaysia’s Japan-bound palm oil exports totaled 9.7 billion yen ($60.7 million) in value that month, according to the Observatory of Economic Complexity.

Prabowo is expected to meet Japanese Prime Minister Sanae Takaichi soon. 

His talks with Naruhito also revolved around energy issues, according to the Cabinet Secretariat while offering little details on the meeting.

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