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Indonesia is preparing to utilize degraded forest land as a strategic source of feedstock for its future biofuel production, including the ambitious transition from the B50 to B100 mandates. Hashim Djojohadikusumo, the Presidential Special Envoy for Climate and Energy, announced on Wednesday that this move is central to the nation's strategy for energy self-sufficiency.
Hashim emphasized that the administration will specifically target areas classified as degraded forests rather than primary forests. This approach ensures that the expansion of the biodiesel program remains aligned with environmental goals. 'The biofuel mentioned by Pak Bahlil, from B50 to B100, will later also use sources from degraded forests, not primary forests,' Hashim stated during the Investor Daily Summit 2026, referring to Bahlil Lahadalia, the Coordinating Minister for Downstreaming and Energy Transition.
The Ministry of Forestry has already pinpointed approximately 12.7 million hectares of such land across the Indonesian archipelago. These regions consist of forests that have lost their timber canopy and have transformed into shrubland or other forms of degraded terrain. Hashim noted that these areas are the primary sectoral source for achieving energy independence through biofuels.
The mandatory B50 program is currently being launched to slash diesel imports, enhance national energy security, and bolster domestic consumption of palm oil. President Prabowo Subianto has hailed the higher blending mandate as a significant milestone toward total energy independence.
Economic projections indicate that the B50 mandate will drive crude palm oil (CPO) demand up to a range of 15.2 million to 16.3 million tons, compared to the previous 13.6 million tons. Similarly, demand for fatty acid methyl ester (FAME) is expected to climb to between 16.7 million and 18 million kiloliters. The government estimates that B50 will contribute 23.49 trillion Indonesian Rupiah in added value to the CPO industry and generate roughly 2.1 million jobs by 2026.
Looking ahead, the government plans to escalate the mandate to B60 as early as next year. Yuliot Tanjung, the Deputy Minister of Energy and Mineral Resources, confirmed that President Prabowo has directed the continued development of the program. Efforts are now focused on securing CPO feedstock by boosting upstream productivity and exploring potential expansions in planting areas.
To keep pace, the biodiesel industry is scaling up. The Indonesian Biodiesel Producers Association (APROBI) projects that an additional 1.1 million kiloliters of capacity will be operational by late 2027 through two new facilities. However, APROBI warned that total demand could reach 20 million kiloliters by 2027, suggesting a need for an additional 2 to 3 million kiloliters of capacity to maintain healthy plant utilization rates of 80% to 85%.
Source: Petromindo