Indonesia to Stop Solar Imports by 2026: Minister Bahlil Lahadalia

Indonesia is poised to eliminate imports of diesel fuel by mid-2026, a move driven by a combination of increased domestic refining capacity and an accelerated national biodiesel program. The announcement, made by Energy and Mineral Resources Minister Bahlil Lahadalia on February 12, 2026, signals a significant step towards energy independence for Southeast Asia’s largest economy.

The shift centers on the phasing out of C-48 grade diesel imports, with a complete cessation targeted for the second half of 2026. Currently, Indonesia consumes approximately 38 to 39 million kiloliters of diesel fuel annually, with imports previously accounting for 15 to 16 million kiloliters. However, the government’s aggressive push towards biodiesel blending, starting with B10 and progressing to B40 (a diesel blend containing 40% palm oil-based biodiesel), has already begun to curb import reliance.

“In 2025, our diesel imports will be no more than 5 million kiloliters,” Lahadalia stated, adding that the remainder of domestic demand will be met through increased domestic production and the B40 program. The key to achieving complete import substitution lies in the expansion of the Balikpapan refinery, which is expected to add 100,000 barrels per day of processing capacity – equivalent to an additional 3 to 4 million kiloliters per year.

The move is not without its impact on existing importers, a point Lahadalia acknowledged candidly. “The importers are getting upset stomachs,” he remarked, highlighting the disruption caused by the policy shift. This sentiment was echoed in reports indicating that importers are bracing for a significant downturn in business as the market shifts towards domestically produced fuel.

Indonesia’s strategy builds on its longstanding commitment to biodiesel. The B40 program, in particular, is a cornerstone of the plan, leveraging the country’s substantial palm oil production to reduce dependence on fossil fuels. The government anticipates introducing B50, a 50% biodiesel blend, in the second half of 2026, further solidifying its commitment to renewable energy sources.

The Balikpapan Refinery Development Master Plan (RDMP) is central to this transition. Operated by PT Kilang Pertamina Balikpapan, a subsidiary of PT Kilang Pertamina International, the upgraded refinery will significantly boost domestic fuel production and enhance national fuel resilience. The RDMP represents one of Indonesia’s largest downstream energy investments, demonstrating the government’s commitment to strengthening its energy infrastructure.

While the focus is currently on diesel, the government is also taking steps to reduce gasoline imports. Lahadalia noted that national gasoline needs reach around 38.5 million kiloliters per year, comprised of RON 90 (28.9 million KL), RON 92 (8.7 million KL), and RON 95/98 (approximately 650,000 KL). Optimization of the Balikpapan refinery is expected to increase the production of gasoline with an octane value above RON 90 by 5.5 million kiloliters per year, thereby reducing imports of higher-grade gasoline by around 3.6 million kiloliters annually.

The broader implications of Indonesia’s energy independence strategy extend beyond reduced import bills. The policy aims to bolster national energy security, shield the economy from volatile global oil prices, and promote the development of the domestic energy sector. The move also aligns with Indonesia’s broader goals of achieving self-sufficiency in key commodities and reducing its reliance on foreign suppliers.

The cessation of C-48 diesel imports in 2026 marks a pivotal moment in Indonesia’s energy landscape. While challenges remain in ensuring a smooth transition and meeting growing energy demand, the government’s proactive approach and strategic investments position the country to achieve its ambitious energy independence goals. The impact on importers is undeniable, but the long-term benefits for Indonesia’s economy and energy security are substantial.