October 28, 2025 | 08:04 am
TEMPO.CO, Jakarta - The Executive Director of the Indonesian Coal Mining Association (APBI) Gita Mahyarani hopes that the government will cancel the plan to implement B50 biodiesel. She stated that this policy could potentially increase production costs and reduce the competitiveness of the mining industry in Indonesia.
According to Gita, since the implementation of B40 biodiesel, the operational costs of mining companies have significantly increased due to the removal of subsidies for the non-public service obligation (PSO) sector. This condition forces companies to directly bear all additional fuel costs.
"The current implementation of B40 has significantly increased production costs. If B50 is implemented, the burden will certainly be even greater," she said when contacted on Monday, October 27, 2025.
She explained that fuel components contribute around 30 to 40 percent of the total mining production costs. A significant increase in biodiesel prices will directly impact the company's profit margin.
"Such a significant price difference has the potential to reduce margins and erode the competitiveness of the industry. If margins continue to decline, the state's revenue from corporate income tax could also decrease," said Gita.
In addition to cost issues, Gita also highlighted technical challenges in using high-blend biodiesel. She mentioned that not all heavy equipment in the mining sector is compatible with B40, let alone B50 fuel.
The use of high biodiesel often leads to technical problems such as the need to replace filters more frequently and adjust engine systems. She emphasized that before the B50 policy is implemented, the government needs to ensure the readiness of the industry and consider its overall economic impact.
The Executive Director of the Indonesia Mining Association (IMA) Hendra Sinadia stated that the mining industry has actually followed all stages of the biodiesel use obligation since the B10, B20, B30, and up to B35 programs. However, the implementation of B40 starting in January 2025 has posed new challenges for the business world.
"At first, there were concerns regarding its impact on engines and heavy equipment, as there were no heavy equipment manufacturers in the world that provided guarantees for the use of biodiesel above B10," said Hendra when contacted on Monday, October 27, 2025.
Prior to this, the Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia stated that the government is still formulating the price formula for B50 biodiesel, which is planned to be implemented in the second semester of 2026. This program aims to strengthen the national energy security and reduce dependency on imported diesel fuel.
"I know the challenges are significant, especially for contractors and mining entrepreneurs. But the price should not increase too much. We are currently looking for a way to achieve balance," said Bahlil at the Mining and Energy Day in Jakarta on Friday, October 24, 2025.
According to Bahlil, trials of blending 50 percent biodiesel with diesel have been conducted on trains, heavy equipment, ships, and cars. If the results are satisfactory, the official launch will be carried out in 2026. He emphasized that this policy has received the approval of President Prabowo Subianto. "If CPO can be utilized domestically, the selling price for farmers will increase," he said.
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