Indonesia's planned introduction of B50 biodiesel is facing resistance from coal industry representatives, who warn that the policy could undermine the sector's competitiveness and profitability.

The Executive Director of the Indonesian Coal Mining Associations (APBI) Gita Mahyarani noted on October 27 that the current B40 implementation has already increased operational costs significantly, as companies must absorb the full cost of biodiesel without subsidies for non-public service obligation (PSO) sectors.

Fuel constitutes 30-40% of total mining production expenses, and any further price increases would directly compress profit margins, she added. The state's revenue from corporate income tax may also decline.

Gita also highlighted technical complications, pointing out that much mining equipment lacks compatibility with B40, let alone B50 fuel.

Hendra Sinadia, the executive director of the Indonesia Mining Association (IMA), observed that global heavy equipment manufacturers typically do not endorse biodiesel concentrations exceeding B10, creating operational uncertainties.

Nevertheless, government officials are proceeding with the B50 initiative. The Minister of Energy and Mineral Resources Bahlil Lahadalia confirmed that the government is formulating pricing mechanisms for B50 biodiesel for a potential rollout in the second half of 2026.

He acknowledged implementation challenges but stressed the program's importance for enhancing energy security and diminishing diesel fuel imports.

Trials of blending 50% biodiesel with diesel on trains, heavy equipment, ships and cars are underway, with final materialization contingent on satisfactory results.