Palm Oil Biodiesel as a Renewable Energy Resource in Indonesia: Current Status and Challenges

Indonesia ranks fourth as the most populous nation after China, India, and the USA and is one of Southeast Asia’s most significant energy users. Due to the rapidly increasing energy consumption and depleted fossil fuel production, Indonesia has become a net importer of oil since 2004. To mitigate the challenge, a policy concerning the utilization of biodiesel as a fossil fuel substitute was firstly launched in 2006. Starting from 2020, the Government of Indonesia issued the mandatory program of biodiesel called B30, making Indonesia hit the record as the highest implementer of biodiesel in the world. However, an in-depth study of the current status of Indonesia’s palm biodiesel has not been reported well. Therefore, this study aims to comprehensively review the current situation and challenges of biodiesel implementation in Indonesia. Here, Indonesia’s energy policy and the current status of Indonesia’s palm biodiesel, including the potential of biodiesel resources and techno-economic and socio-political aspects, are comprehensively discussed. Based on the analyses, biodiesel mandatory policy has a significant impact on economic and social aspects. It is projected that the program will increase the labor to 10,182 workers in biodiesel industries and save the foreign exchange at around US$4.46 billion by 2030. Finally, several main challenges faced along with several plausible mitigations to overcome the problems in implementing palm oil biodiesel production are also highlighted. Highlights Indonesian palm biodiesel program contributes to increasing the NRE portion Biodiesel program has a significant impact on economic and social aspects The program is projected able to increase the labor to 10,182 workers by 2030 The program can save the foreign exchange at around US$4.46 billion by 2030 Sustainable biodiesel must consider diversification of biodiesel feedstock Graphical Abstract