Indonesia’s energy transition gained momentum in 2025 with the successful implementation of the B40 biodiesel policy. The program significantly reduced diesel imports while delivering measurable environmental benefits. These achievements are now laying the groundwork for an ambitious target: ending diesel imports entirely by 2026.
Key Facts & Background
- Diesel Import Reduction:
- B40 policy cut diesel imports by 3.3 million kiloliters (kL) in 2025.
- Imports fell from 8.3 million tons in 2024 to 5 million tons in 2025.
- Biodiesel Utilization:
- Domestic biodiesel use reached 14.2 million kL in 2025.
- This exceeded the government’s target of 13.5 million kL, achieving 105.2% of the goal.
- Environmental Impact:
- Emissions reduced by 38.88 million tons of CO2 equivalent.
- Economic Benefits:
- Foreign exchange savings of Rp130.21 trillion.
- Added value from converting crude palm oil (CPO) into biodiesel reached Rp20.43 trillion.
- Future Plans:
- Government aims to eliminate diesel imports by 2026.
- Supported by the planned rollout of B50 biodiesel in the second half of 2026.
- Refinery Development Master Plan (RDMP) in Balikpapan, East Kalimantan, expected to boost domestic diesel production capacity.
- Limited imports of high-quality Solar CN51 may continue for heavy industry needs.
Strategic Insights
The success of the B40 policy demonstrates Indonesia’s ability to leverage domestic resources for energy security while advancing climate goals. By reducing reliance on imported diesel, the government not only saved trillions in foreign exchange but also strengthened the role of palm oil in the national energy mix. The environmental gains, measured in millions of tons of avoided carbon emissions, reinforce Indonesia’s position as a regional leader in renewable energy adoption.
Looking ahead, the transition to B50 and the completion of the RDMP project will be critical milestones. If executed effectively, Indonesia could achieve its target of ending diesel imports by 2026, a move that would reshape its energy landscape and reduce vulnerability to global fuel price volatility. However, maintaining flexibility for specialized fuels like Solar CN51 highlights the pragmatic balance between ambition and industrial needs. The broader impact of these policies will extend beyond energy, influencing trade, investment, and the country’s long-term sustainability agenda.