Palm oil producing countries increase biodiesel mandates
21 April 2026
The world’s dominant palm oil producers—Indonesia and Malaysia that together supply some 80% of the global palm oil demand—are increasing their respective biodiesel blending mandates to reduce diesel fuel imports, as diesel prices have increased significantly driven by the conflict in the Persian Gulf.
Indonesia is set to stop importing low-grade diesel fuel from July 1st as it launches its B50 biodiesel program. Agriculture Minister Andi Amran Sulaiman said the policy will increase the share of palm oil-based biodiesel (fatty acid methyl ester, FAME) in subsidized diesel, known locally as Solar, from 40% to 50%.
In January, Indonesia was about to delay the B50 program, due to technical and funding concerns. Now, faced with the energy crisis, Indonesia intends to go ahead with the B50 mandate, in spite of concerns over strains on global palm oil supplies and the use of food resources for motor fuels (~80% of palm oil supply is used in food manufacturing).
Biodiesel consumption in Indonesia increased to 14.2 billion liters in 2025, up from 9.3 billion liters in 2021, according to media reports. Looking ahead, the government also plans to phase out imports of mid- and high-octane gasoline from 2027 and replace it with renewable gasoline made from biomass-based feedstocks.
In Malaysia, the government has agreed to increase its 10% biodiesel mandate (B10) to a 15% biodiesel blend. The higher blend mandate would be implemented gradually, starting with B12.
Malaysia currently imposes a B10 mandate for the transportation sector, while a 20% mandate has been implemented in certain territories.
“If we want to reach a higher level of B20 and B30, investment in infrastructure needs to be made, specifically upgrading the infrastructure. So for the medium-term targets, there is indeed a need for us to upgrade the infrastructure,” said Economy Minister Akmal Nasrullah Mohd Nasir.
Source: BioEnergy Times | The Star