MEMR Regulation Number 3 of 2026 Mandates ISPO Certification for Bioenergy Starting in 2027

Introduction

On 13 January 2026, the Ministry of Energy and Mineral issued Minister of Energy and Mineral Resources Regulation Number 3 of 2026 on Indonesian Sustainable Palm Oil Certification for Palm Oil Bioenergy Business Activities (“MEMR Regulation 3/2026”), which took effect on 22 January 2026. This Regulation aims to provide a clear legal basis for the implementation of Indonesian Sustainable Palm Oil (“ISPO”) certification specifically for the palm oil bioenergy business sector. Through this Regulation, the Government establishes sustainability standards for business activities producing biofuels, biomass, and/or biogas derived from palm oil.

MEMR Regulation 3/2026 implements Presidential Regulation Number 16 of 2025 on the Indonesian Sustainable Palm Oil Certification System. The Government recognizes the need for specific regulation to ensure that the palm oil bioenergy supply chain complies with social, economic, and environmental feasibility aspects. Furthermore, the Government aims to establish traceable and legally compliant bioenergy governance while strengthening the competitiveness of Indonesian bioenergy products in the global market, which increasingly demands sustainability standards.

 

Key Provisions

Mandatory ISPO Certification

Bioenergy Companies are now required to obtain ISPO Certification for Palm Oil Bioenergy Business Activities. Pursuant to Article 2, the implementation of such certification must apply three main principles, namely compliance with laws and regulations, traceability, and continuous business improvement. This obligation applies to any individual or business entity (whether incorporated or unincorporated) in Indonesia that produces biofuels, biomass, and/or biogas derived from palm oil.

Supply Chain Traceability Mechanism

The Government strengthens supervision over the origin of raw materials through Article 3. Bioenergy Companies must select and comply with one of the following supply chain traceability models:

1. Segregation: This model must be applied if 100% (one hundred percent) of the raw materials are ISPO-certified and all processing facilities are used exclusively for such certified raw materials.
2. Mass Balance: This model is applied if ISPO-certified raw materials constitute at least 10% (ten percent) up to less than 100% (one hundred percent) of the total raw materials.

Procedures and Requirements for Certification Application

Article 5 provides that Bioenergy Companies must submit an application for certification to an ISPO Certification Body (“ISPO CB”) accredited by the National Accreditation Committee (KAN). Applicants are required to attach documents, including relevant business licenses (for biofuels, biomass, or biogas) and ISPO certificates for palm oil plantation business activities. If the company does not hold an ISPO certificate for plantation business activities (for example, where supply is sourced from third parties or its own plantation has not yet been certified), it may use an ISPO certificate for downstream palm oil industry activities as a substitute. The field and administrative audit process is limited to a maximum of 3 (three) months from the date the agreement is signed.

Validity Period and Surveillance Obligations

The ISPO Bioenergy Certificate is valid for a period of 5 (five) years. However, to ensure continuous compliance, Article 24 requires the implementation of surveillance by the ISPO CB according to the following schedule:

1. The first surveillance must be conducted no later than 12 (twelve) months after the certificate is issued.
2. Subsequent surveillance must be conducted at least once every 2 (two) years. If the surveillance results identify non-conformities that are not corrected within 3 (three) months, the certificate may be revoked.

Technical Assessment Indicators

In the Annex to MEMR Regulation 3/2026, technical indicators are stipulated and must be fulfilled by companies during the audit, including:

1. Economic and Productivity Aspects: Companies must possess documents calculating annual productivity (output-input ratio) and documents calculating the Net Energy Balance, covering data on energy inputs (electricity, fuel) and energy outputs produced.
2. Social Aspects: Companies must have wage policy documents, Corporate Social Responsibility (CSR) planning and reporting documents, and the implementation of an Occupational Safety and Health Management System (SMK3) along with its internal reports.
3. Environmental Aspects: Companies must hold environmental permits (AMDAL/UKL-UPL) and evidence of periodic reporting on the implementation of environmental management to the competent authorities.

Right to Use the ISPO Logo

Article 15 provides that Bioenergy Companies that have obtained ISPO certification are entitled to display the ISPO logo as the official identity of certified products. The use of this logo is permitted to be affixed at factory locations as well as on bioenergy product packaging.

 

Sanctions

Pursuant to Article 34, the Minister is authorized to impose administrative sanctions on Bioenergy Companies that fail to comply with certification obligations, reporting obligations, or the maintenance of ISPO principle standards. The sanction mechanism begins with written warnings issued up to a maximum of 3 (three) times, each with a duration of 30 (thirty) calendar days. If the company continues to fail to comply after the expiration of the warnings, the Minister shall impose administrative fines in accordance with the provisions on Non-Tax State Revenue. If the obligations remain unfulfilled or the fines are not paid, the most severe sanction may be imposed in the form of temporary suspension of business activities, either directly executed by the Minister or through a proposal for suspension to the Governor as the issuer of the business license where the license is issued by the regional government.

 

Transitional Provisions

Article 35 stipulates that the obligation to obtain ISPO certification for Bioenergy Companies becomes effective on 20 March 2027. This provision provides a transition period and preparation time of approximately one year for businesses to make the necessary adjustments.

 

Closing

MEMR Regulation 3/2026 mandates ISPO certification for palm oil bioenergy businesses in order to strengthen sustainable, traceable, legally compliant, and globally competitive governance. This Regulation requires companies to comply with traceability principles through the Segregation or Mass Balance models and to meet technical indicators covering economic, social, and environmental aspects. With a certificate validity period of 5 years and periodic surveillance, the Government also establishes administrative sanctions up to the suspension of business activities for non-compliance. As this obligation becomes effective on 20 March 2027, businesses are able to align their operations before the applicable deadline.