Indonesia, as a global leader in biodiesel production, significantly benefits from its abundant palm oil resources. The country stands as one of the top biodiesel producers worldwide. Leveraging its position as the world’s largest palm oil producer, Indonesia efficiently utilizes this resource in biodiesel production, setting a global standard in palm oil-based biofuel.

Biodiesel Production and Capacity

Indonesia’s biodiesel production has shown remarkable growth, reaching over 8 million kiloliters in recent years, showcasing a robust industry capable of meeting both domestic and global demand.

The country’s biodiesel production capacity is substantial, with a reported capacity exceeding 12 million kiloliters, demonstrating its readiness to meet increasing biodiesel demands.

Biodiesel Mandate

Indonesia’s national biodiesel mandate aims to blend diesel with palm-based Fatty Acid Methyl Ester (FAME), significantly reducing fuel imports, boosting domestic palm oil demand, and cutting down emissions.

The mandate is efficiently executed by the state-owned energy giant, Pertamina, along with several private companies, ensuring widespread distribution across the nation.

Indonesia has progressively widened its biodiesel blending initiative. Starting with the Public Sector Obligation (PSO) industries, it expanded to a nationwide B20 program in 2018, followed by an upgrade to the B30 program in January 2020. By August 2023, the country further increased the blending rate to 35% across all regions.

The Government of Indonesia is actively working towards exceeding the 35% blending rate. Notably, a 2022 road test evaluated the performance of two diesel fuel types with varying bio component rates: 40% FAME and a mixture of 30% FAME with 10% renewable diesel.

In May 2023, the GOI initiated tests for a 50% renewable diesel blend, specifically targeting heavy machinery used in the mining sector.

The successful implementation of the B30 program, mandating a 30% biodiesel blend in diesel fuel, showcases Indonesia’s commitment to renewable energy and its leading role in global biofuel initiatives.

This mandate has led to a significant increase in domestic biodiesel consumption, reducing Indonesia’s fossil fuel dependency and enhancing energy security.

Environmental contribution

Indonesia’s latest submission to the UNFCC in September 2022 underlines its enhanced commitment to reducing greenhouse gas emissions. The updated targets are set at 31.89% reduction (unconditional) and 43.2% (conditional) by 2030, an increase from the previous goals of 29% and 41%, respectively. The unconditional target emphasizes Indonesia’s dedication to achieving these goals without relying on international assistance.

In the energy sector, these goals are underpinned by scenarios where there is biodiesel use (specifically B30) in 90% of the total diesel fuel pool, focusing on sector targets without international support; or biodiesel use to 100% of the diesel pool with international support, representing a more ambitious mitigation effort.

Indonesia has also developed the Long-Term Low Carbon Strategy (LTS-LCCR 2050): This strategy positions biofuels as the primary energy source for Indonesia’s transportation sector by 2050. The plan involves a gradual shift from gasoline to bioethanol and from conventional gasoline and diesel to palm oil-based biodiesel and renewable diesel, marking a significant transition towards a low-carbon future.

Indonesia’s biodiesel industry is aligned with global sustainability standards. The country’s adherence to the Indonesian Sustainable Palm Oil (ISPO) certification underlines its commitment to environmentally responsible practices.


Indonesia’s biodiesel exports are substantial, with the European Union and Asian markets being primary destinations. The country’s export volume stands as a testament to its global competitiveness in the biodiesel sector.

Exports are predicted to reach 630 million liters in 2023. This forecast, driven by increasing demand and a narrower price difference between palm oil and diesel, marks a significant recovery from the lower export volumes of 2020 and 2021, though it remains below the record highs of previous years.

China continues to be the leading destination for Indonesian biodiesel, receiving 53% of the exports in 2022. In the first half of 2023, shipments to China accounted for 63% of the total projected exports for the year. Following China, significant export volumes are also directed to the Netherlands, Peru, and the Philippines.

Exports of Hydrogenation Derived Renewable Diesel (HDRD) are estimated at 76 million liters in 2023, with an expected rise in demand from the European Union. But the potential for HDRD sales in Europe hinges on Indonesian plants adapting to use and certify EU RED-permitted waste stream fats and oils.

Indonesian biodiesel continues to be held back by trade barriers from the European Union, which has taken a protectionist stance towards Indonesia’s biodiesel imports, imposing a series of antidumping and countervailing tariffs on Indonesia, as well as non-tariff measures. Indonesia has challenged the EU on these barriers at the WTO.