Businesses Required to Implement Biofuel Blending Gradually under Decree of the Minister of Energy and Mineral Resources Number 113.K/EK.05/MEM.E/2026

Introduction

On March 3, 2026, the Ministry of Energy and Mineral Resources ("MEMR") issued the Decree of the Minister of Energy and Mineral Resources of the Republic of Indonesia Number 113.K/EK.05/MEM.E/2026 on the Phasing of Biofuel Utilization ("MEMR Decree 113/2026"). MEMR Decree 113/2026 requires every fuel oil business to blend biofuel into fuel oil for commercial purposes. Based on the recitals, this obligation aims to achieve energy self-sufficiency and encourage the utilization of renewable energy. Its implementation is aligned with energy transition policies and is carried out gradually with measurable targets.

Key Provisions

Biofuel Blending Obligation

The FIRST Dictum requires every fuel oil business to blend biofuel with fuel oil. This obligation applies to trading activities for commercial purposes. Businesses must adjust their production and distribution activities to comply with this obligation.

Categories and Types of Fuel Blending

The SECOND Dictum stipulates the types of fuel that business entities must blend. This obligation includes:

1. Blending of biodiesel with specific types of fuel oil in the form of diesel fuel;

2. Blending of biodiesel with general types of fuel oil in the form of diesel fuel;

3. Blending of bioethanol with general types of fuel oil in the form of gasoline;

4. Blending of biohydrocarbon diesel with general types of fuel oil in the form of diesel fuel (with a cetane number of 51) at gas stations for land transportation; and

5. Blending of bioavtur with general types of fuel oil in the form of aviation turbine fuel (avtur).

Classification of Specific and General Fuels

The classification of fuel types is set forth in the THIRD Dictum and the FOURTH Dictum. Specific fuel oils are fuels, whether pure or blended with biofuel, that have specific types, standards, qualities, prices, volumes, and designated consumers, and are subsidized by the government. Meanwhile, general fuel oils are fuels with similar specifications that do not receive subsidies.

Phased Blending Percentage Targets

Business entities must fulfill the biofuel blending targets according to the percentages and regional coverage listed in the Annex, as stipulated in the FIFTH Dictum. The details of these targets include:

1. Biodiesel (Subsidized & Non-Subsidized): Biodiesel blending applies nationally. For subsidized biodiesel, the target is set at 40% in 2026 and increases to 50% for the 2027 to 2030 period. For non-subsidized biodiesel, a 40% target applies from 2026 to 2027, then increases to 50% for the 2028 to 2030 period.

2. Bioethanol (Non-Subsidized Gasoline): Bioethanol blending is carried out gradually based on regions. In 2026, a 5% target applies in East Java, the Special Region of Jakarta, and West Java. In 2027, the coverage expands to Banten with a constant target of 5%. In 2028, the coverage further expands to Central Java, the Special Region of Yogyakarta, and Bali with a 5% target. In the 2029 to 2030 period, the target increases to 10% with regional coverage including Lampung.

3. Biohydrocarbon Diesel (Non-Subsidized Diesel): Blending applies nationally with a target of 5% in the 2027 to 2028 period, and increases to 10% in the 2029 to 2030 period.

4. Bioavtur (Non-Subsidized Avtur): Blending applies to flights at Soekarno-Hatta Airport in Banten and I Gusti Ngurah Rai Airport in Bali. The target is set at 1% for the 2026 to 2028 period, and increases to 5% for the 2029 to 2030 period.

Implementation Mechanisms and Considerations for Businesses

For bioavtur blending, businesses must comply with the technical requirements for air transportation as set forth in the SIXTH Dictum. The implementation of phased blending also considers the availability of raw materials, the availability of financing for biofuel utilization, and the readiness of supporting infrastructure, as stated in the SEVENTH Dictum.

Transitional Provisions

MEMR Decree 113/2026 took effect on its date of issuance, namely March 3, 2026. The subsequent implementation of biofuel blending must be carried out in accordance with the prevailing laws and regulations in the field of biofuel business and utilization. In implementing this obligation, businesses must refer to the biofuel volume allocations as determined under a separate Ministerial Decree, as set forth in the EIGHTH and NINTH Dictums.

Closing

MEMR Decree 113/2026 requires fuel oil businesses to blend biofuel into fuel oil for commercial activities, including biodiesel (in subsidized and non-subsidized fuels), as well as bioethanol, biohydrocarbon diesel, and bioavtur (specifically in non-subsidized fuels). This obligation applies with gradually increasing percentage targets until 2030, along with specific regional coverage depending on the fuel type. In addition to regulating fuel types and classifications, MEMR Decree 113/2026 also stipulates blending implementation mechanisms, including for bioavtur, as well as key considerations such as raw material availability, financing for biofuel utilization, and the readiness of supporting infrastructure. The implementation of these obligations follows the provisions on biofuel business and utilization and refers to the volume allocations determined by the Minister of Energy and Mineral Resources. MEMR Decree 113/2026 took effect on its date of issuance, namely March 3, 2026, requiring businesses to adjust their production and distribution activities to comply with the blending obligations and volume allocations according to the phasing.