As global oil prices climbed above $100 per barrel amid escalating tensions in the Middle East, Indonesia announced plans to accelerate its biofuel transition. On March 9, 2026, Energy and Mineral Resources Minister Bahlil Lahadalia said the government intends to require gasoline to contain 20% ethanol (E20) and speed up the rollout of a 50% biodiesel blend (B50), a significant step up from the country’s current B40 policy.
According to Lahadalia, the move is part of Indonesia’s effort to protect its national energy supply during a period of global uncertainty. He said the government is exploring the best alternatives to maintain fuel security while also encouraging cleaner energy use.
The biofuel push, he noted, is expected to strengthen energy independence and support environmental goals at the same time.
Deputy Energy Minister Yuliot Tanjung explained that the proposed B50 blend, which combines 50% palm oil-based biodiesel and 50% conventional diesel, could potentially be introduced in the second half of 2026 or even earlier.
However, he stressed that no final decision has been made yet, as the biodiesel steering committee led by Coordinating Economic Affairs Minister Airlangga Hartarto continues monitoring global oil price developments.
Indonesia had previously shelved plans to launch B50 in 2026 due to technical and financial challenges, choosing instead to continue with the B40 program. However, the recent surge in global crude prices has prompted policymakers to reconsider the strategy, illustrating how quickly international conflicts can reshape national energy planning.
Meanwhile, Finance Minister Purbaya Yudhi Sadewa said the government is ready to increase fuel subsidy allocations if rising energy prices begin to affect domestic stability. As the world’s largest palm oil producer, Indonesia faces the challenge of maintaining affordable fuel while also advancing its long-term bioenergy transition.
