Biofuels Annual
ID2025-0029 – Indonesia’s aggressive biodiesel blending mandate rising from 35 percent to 40 percent in early 2025 has resulted in no exports due to limited production capacity. Expansion to B50 will require both significant subsidies and additional production capacity. The bioethanol market is projected for small growth in 2025, with E5 sales expected to remain limited in 2025 as the majority of the gasoline market is captured by subsidized fuel. In May and June 2025, the Government of Indonesia issued two conflicting regulations on biofuels, with one appearing to block biofuel imports while the other simplifies import processes. It remains unclear how these regulatory changes relate to the bilateral trade deal announced on July 22, 2025.
Indonesia Raises Palm Exports Levy
ID2025-0022 – On May 14, 2025, Indonesia raised export levies for most palm oil products, from 7.5 percent to 10 percent for crude products and up to 9.5 percent for refined products. The levy increases are meant to sustain the new B40 blend mandate program.
Indonesia Curbing Palm Waste Exports – Discouraging CPO Mixture Practices
ID2025-0009 – In January 2025, the Government of Indonesia (GOI) enacted a new regulation to curb exports of palm waste products, citing that they have already exceeded the “reasonable capacity,” in the hopes of shoring up feed stock supplies for domestic cooking oil and biofuels production. This measure is also an attempt to halt “mixture practices” of blending crude palm oil (CPO) with palm waste exports to circumvent the once higher CPO export levy and take advantage of foreign demand for waste-based feedstocks.
After a Decade Indonesia is Updating Its Biofuel Roadmap
ID2025-0006 – Indonesia’s new biofuel roadmap shows the government’s 10-year plan for higher biodiesel blending rates, bioethanol’s inclusion in non-subsidized gasoline, and drop-in biofuels. The roadmap draft also recognizes organic waste as a biofuel feedstock. Although the roadmap shows lofty blending goals for bioethanol, it lacks the additional regulations that provide subsidies to cover the price spread between bioethanol and gasoline like the ones that prop up the biodiesel blend mandate. Without these subsidies, fuel retailers and biofuel producers will remain disincentivized to meet the new bioethanol blend mandates. The roadmap does not address tariff rate reductions for imported bioethanol.
Biofuels Annual
ID2024 – 0018 – Indonesia’s fuel grade ethanol consumption remains small and localized in 2024, a year after the restart of the ethanol program. The formation of a taskforce for sugarcane expansion is meant to advance Indonesia’s self-sufficiency goals in sugar and bioethanol. Biodiesel production is projected to rise by 3 percent to 13 billion liters in 2024 on expected higher diesel use combined with the government-mandated 35-percent blending rate. Combined palm oil mill effluent (POME) and palm fatty acid distillate (PFAD) exports remain high on continued demand from overseas markets, lower export levies relative to crude palm oil, and a lack of incentives for local refiners to use biodiesel feedstocks other than crude palm oil.
Biofuels Annual
ID2023-0018
The introduction of E5 gasoline in July 2023 restarted Indonesia’s bioethanol consumption after years of inactivity, albeit to a modest start of an estimated 2 million liters for 2023 due to E5’s price premium in a price sensitive market. Meanwhile, Indonesia’s new B35 biodiesel blending mandate reached nationwide coverage in August 2023 and is expected to raise biodiesel consumption 25 percent to 13 billion liters. The government of Indonesia (GOI) continues to carry out tests for renewable diesel (HDRD) and sustainable aviation fuel (SAF).
Pertamina Rolls Out E5 Blending in June 2023
ID2023-0013
State-owned Indonesian energy company Pertamina will launch a new gasoline product containing 5 percent ethanol in late June 2023, utilizing ethanol derived from domestic sugarcane. According to Presidential Regulation 40/2023, Indonesia aims to produce 1.2 billion liters of sugarcane ethanol by 2030. Implementation of an eventual E10 blending mandate nationwide would require an estimated 890 million liters of ethanol per year, equal to 17 percent of total U.S. ethanol exports in 2022.