The Biodiesel Paradox: Analyzing the Multi-Dimensional Challenges of Indonesia's B50 Mandate Implementation

Indonesia’s B50 biodiesel mandate, targeting a 50% palm oil biodiesel blend by 2026, builds on earlier blending policies (B20–B40) but faces unprecedented implementation complexity. This qualitative literature review, drawing on over 80 sources from 2020–2025, uses thematic synthesis to examine challenges in five domains: production capacity, technical compatibility, economic sustainability, environmental impacts, and governance coordination. The analysis identifies major bottlenecks including insufficient FAME production infrastructure, stagnating crude palm oil output, growing subsidy dependence due to price inversion, material degradation in non-compatible engines, deforestation and land-use risks undermining climate and market objectives, and fragmented, multi-ministerial governance. Evidence indicates that a direct shift to B50 in 2026 is not feasible, and suggests an intermediate B45 pathway emphasizing diversified feedstocks (such as POME and used cooking oil), restructured financing, and improved stakeholder coordination. The study highlights a central paradox: earlier biodiesel policy successes generate cumulative pressures that make more ambitious blending targets increasingly difficult to implement. It concludes that adaptive, evidence-based phasing and robust sustainability frameworks are essential to reconcile Indonesia’s energy security, economic, and environmental goals for biofuel expansion.