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In a bold step toward greener skies, Indonesia is betting on coconut oil to help decarbonize aviation fuel, but the pioneering Banyuasin bioavtur project is already running into a raw-material reality check.
Aviation fuel accounts for only about 1 percent of national emissions, yet it remains a critical target for low-carbon innovation. In Tanjung Api-api, South Sumatra, a new coconut oil plant designed to supply bioavtur feedstock is taking shape. Green Power Palembang and Japan's Green Power Development Corporation are jointly investing Rp310 billion in the project, which is expected to convert coconuts into crude oil suitable for green aviation fuel processing.
Construction of the facility began in early January 2026 in Banyuasin. The plant will process 30,000 tons of coconuts annually, or roughly 100 tons per day, with the crude oil shipped to Japan for refining into bioavtur. With a processing yield of 0.75 to 0.83 and a density of 0.75 kilograms per liter, the output will feed the production of 30 to 34 million liters of bioavtur each year, equal to about 0.7 percent of Indonesia's national aviation fuel demand.
The initiative stands out for a particular technological twist: it relies on non-standard coconuts, meaning fruits that fail to meet export and domestic consumption specifications. Indonesia has abundant potential here. According to FAO data, the country produced 15 billion coconuts last year, of which 60 percent were absorbed by domestic industries, 27 percent exported, and the remainder consumed by households.
That, however, is precisely where the challenge emerges. Supplies of old, small, or damaged coconuts are not yet large enough to feed the Banyuasin plant. Producing 100 tons of crude coconut oil requires 500 to 600 tons of rejected coconuts per day, or up to 219,000 tons a year. South Sumatra itself produces only 68,000 tons of coconuts annually, meaning the shortfall will have to be sourced from other regions, raising logistics costs.
The financial model has been mapped out by the sponsors, but the second hurdle is more complex. Across many regions, smallholder coconut trees are between 30 and 40 years old, well past their productive prime. Local authorities around South Sumatra will need to push replanting programs to build a reliable supply chain for the plant. In effect, intensifying smallholder coconut plantations offers a route to anchor green innovation from upstream to downstream.
Indonesia has already seen what strategic, community-based partnerships can deliver. In Tanah Laut and Hulu Sungai Tengah, South Kalimantan, Japanese tire maker Bridgestone partnered with local communities to run a rubber processing facility, sourcing rubber and latex from smallholders. Over a seven-year engagement that drew on expertise from local universities, the collaboration raised both the quality and the sustainability of rubber production.
The same model has also helped rehabilitate protected forests that had been degraded by encroachment. Community groups organized under a social forestry framework and developed rubber agroforestry systems that deliver multiple income streams, with rubber feeding Bridgestone's plant and complementary products such as candlenuts and fruit supporting household earnings.
If the Banyuasin coconut oil facility were to apply a similar community-empowerment model, it could secure a sustainable supply of non-standard coconuts while meeting the social dimensions of sustainability certification. Green aviation fuel would then rest on a supply chain that is renewable not only in energy terms, but also in the livelihoods it sustains.
Source: Tempo.co English