Biodiesel to Cut Indonesia’s Oil Fuel Import by $3.9 Billion this Year

Indonesia will reduce diesel fuel imports worth $3.9 billion this year amid the country’s growing biodiesel industry, validating President Joko “Jokowi” Widodo’s decision to rely on biodiesel for national energy security.  The country’s current account has been in deficit in the past decade, partly because it must import oil fuel like kerosene and diesel from abroad to meet its growing domestic demand.  

To reduce the oil fuel imports, Indonesia started mandating B-20 biodiesel, a mix of diesel oil fuel with 20% biodiesel produced from crude palm oil, in 2016 and increased it to B-30 last year.  Jokowi said the program had shown results.  Indonesia’s biodiesel industry is estimated to cut Rp 56 trillion ($3.9 billion) in import costs this year, up 47% from Rp 38 trillion in 2020.   Apart from reducing imports, Indonesia, the world’s largest palm oil producer, also benefit from the program by creating a sustainable demand for the commodity.