Lang
A senior energy analyst said on Thursday that Indonesia must move quickly to strengthen its palm oil-based biodiesel programme as uncertainty in global energy markets escalates. The warning comes amid tensions in the Middle East that have reignited concerns over global oil supply routes, according to Jakarta Globe.Id.
Iran had recently hinted at the possibility of closing the Strait of Hormuz — a critical waterway for global oil shipments — in response to US strikes targeting its nuclear facilities, stoking fears of a sharp spike in oil prices. Although the closure did not materialise, the mere threat highlighted how vulnerable countries still heavily reliant on fossil fuel imports, such as Indonesia, remain.
Energy expert Satya Widya Yudha said: "The 12-day war between Israel and Iran, despite the fragile US-brokered truce, should serve as a wake-up call for us." He added: "We must move quickly towards energy independence, and the palm oil-based biofuel programme is a key step in that direction."
Indonesia currently implements the "B40" policy, which mandates blending 40% palm oil into diesel fuel. The government aims to raise this ratio to "B50" by 2026, eventually working towards "B100", where the biofuel is derived entirely from palm oil.
Satya added during a discussion held by the B-Universe media group in Tangerang: "President Prabowo Subianto has clearly expressed his support for developing bioenergy. The B40 programme is already being implemented, and increasing the blending ratio will help reduce our dependence on imported oil."
As the world's largest palm oil producer, Indonesia is ideally positioned to expand its use of biofuel. The government has allocated 15.6 million kilolitres of biodiesel for distribution in 2025. According to the Indonesian Palm Oil Association (GAPKI), around 4.1 million tonnes of palm oil had been used to produce domestic biofuel as of April this year.
However, the country did not export any volumes of biodiesel during the first four months of 2025, compared with 40,000 tonnes over the same period last year.
Juan Permata Adoe, deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin), stressed the importance of self-reliance. When asked about the possibility of exporting biodiesel given the risks to global oil supply, he urged caution, saying:
"Our priority must be to meet domestic needs first. This programme is aimed at replacing imported fuel, not just generating export revenue," he 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 volatility in the global energy market.