Tangerang: Indonesia must move quickly to strengthen its palm oil-based biodiesel program in the face of rising global energy uncertainties, a leading energy analyst said Thursday. The warning comes amid tensions in the Middle East that have reignited concerns over global oil supply routes, reports Jakarta Globe.Id.
Iran recently signaled the possibility of closing the Strait of Hormuz — a critical waterway for global oil shipments — in retaliation after U.S. strikes on its nuclear facilities, prompting fears of oil price surges. Though the closure has not taken place, the threat underscores the vulnerability of countries like Indonesia that still rely heavily on imported fossil fuels.
“The 12-day war between Israel and Iran, even under a fragile U.S.-brokered ceasefire, should serve as a wake-up call,” said energy expert Satya Widya Nugraha. “We need to move faster toward energy independence, and our palm oil-based biofuel program is a key step in that direction.”
Indonesia is currently implementing the B40 policy, which mandates a 40 percent palm oil blend in its biodiesel. The government aims to raise this to B50 by 2026 and eventually reach B100 — where biodiesel would be entirely derived from palm oil.
“President Prabowo Subianto has made it clear he supports biomass development. The B40 program is already in place, and increasing the blend will help reduce our dependence on imported oil,” Satya said during a discussion at B-Universe Media Holdings in Tangerang.
As the world’s largest palm oil producer, Indonesia is well-positioned to expand its biofuel use. The government has allocated 15.6 million kiloliters of biodiesel for distribution in 2025. According to the Indonesian Palm Oil Association (GAPKI), around 4.1 million tons of palm oil had been used for domestic biodiesel production as of April this year.
However, the country has not exported any biodiesel in the first four months of 2025, compared to 40,000 tons in the same period last year.
Juan Permata Adoe, deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin), echoed the call for self-reliance. When asked about the possibility of biodiesel exports in light of global oil supply risks, he urged caution.
“Our priority should be to meet domestic needs first. This biodiesel program is meant to replace imported fuel, not just to generate export revenue,” Juan said.
Both experts agreed that boosting palm oil-based biodiesel production is not only a climate-conscious step but also a strategic move to shield Indonesia from global energy market volatility.
