Indonesia’s president-elect Prabowo Subianto, who will assume office in October, has placed the country’s food and energy security at the top of his priority list, including replacing all $20 billion of the country’s annual diesel oil imports with biodiesel made from palm oil.
“We want to go green in a very quick way,” Prabowo told the Qatar Economic Forum in Doha on May 15. “Imagine the savings we will have when we switch to biofuel.” The Southeast Asian country is the world’s largest producer of palm oil and finances its biodiesel program through levies on exports of palm oil products.
Platts, part of S&P Global Commodity Insights, assessed the price of biodiesel FOB Southeast Asia at $1,004/mt on May 14, down by a percentage point from the start of the week.
The president-elect’s aim to reach self-sufficiency in energy is focused on “downstreaming,” or processing domestic raw materials into finished goods.
“In the end, we have to concentrate on processing our natural resources,” he said. “We have to make a great effort in downstreaming and to industrialize, and all of this needs good governance.”
Indonesia already has a mandate to blend 35% of its diesel with palm-based biodiesel, and one of Prabawo’s campaign pledges was to keep increasing that share.
For example, he plans to mandate 50% biodiesel fuel (B50) and 10% bioethanol fuel (E10) by 2029. Indonesia’s biodiesel mandate is the largest among the various downstream initiatives started by outgoing president Joko Widodo for the country’s palm oil sector. Indonesia’s use of palm oil for biofuels rose above its food use in 2023.
For 2024, Indonesia has raised its allocation for palm oil-based biodiesel by 1.9% from 2023 to 13.41 million kiloliters, according to the country’s Energy and Mineral Resources ministry.
In the 2024 first quarter, Indonesia produced 3.39 million kiloliters of biodiesel, up 14% on the year, data from the Indonesia Biofuel Producer Association, or Aprobi, showed May 8.
In 2023, Indonesia produced 11.82 million kiloliters of biodiesel, up 15% from the year before, while consumption stood at 10.43 million kiloliters.