Review of Biodiesel Policy in Indonesia

Abstract

Indonesia is known as an energy-rich country, both fossil and renewable. In 2019, the national energy supply still relied on oil, coal and natural gas, with a total proportion in the primary energy mix of 91.5%. Import dependency on petroleum and the high burden of the state budget for fuel subsidies are why the Indonesian Government implements biofuel policies in Indonesia. Biofuel development in Indonesia has been implemented from 2006 with Presidential Regulation No. 5 of 2006 to Regulation of the Minister of Energy and Mineral Resources No. 41 of 2018. Since 2008, the Government has issued a mandatory policy for using biodiesel with a mixture content of 2.5%. The Government gradually encouraged increasing biodiesel content to 7.5% in 2010, 10% in 2011, 15% in 2015, and 20% in 2016. By 2020, biodiesel mandatory is targeted to be 30%. Over the years, the biodiesel industry has shown an increase in quantity and capacity. Using biofuels has many positive impacts, such as reducing diesel import and CO2 emission and increasing CPO and labour’s added value. On the other hand, the mandatory biofuel policy negatively impacts the environment due to the possibility of land expansion. This study aims to review biodiesel policies in Indonesia since 2006 and analyze the problems and outputs in each policy and challenge for future biodiesel development.

Utilization of palm oil based biofuel to support sustainable energy transition in Indonesia

“…Biodiesel is still considered too difficult to replace fossil energy, according to Widrian et al (2022) and Nurkhoiry et al (2021) in implementing the mandatory biodiesel policy, Indonesia must prepare several things (i) production cost of biodiesel, (ii) biodiesel quality, and (iii) stakeholder support [14,25]. In this way, the government's steps in implementing the mandatory biodiesel policy so far have been categorized as quite aggressive.…”

“…It will be less toxic to the environment than diesel. However, biodiesel can also have a negative impact on the environment related to the risk of land expansion whose use is not properly monitored as stated by Widrian et al (2022) [14]. Expansion of land for oil palm plantations will encourage an increase in greenhouse gas emissions due to land conversion, and also increase greenhouse gas emissions from the biodiesel production process itself.…”

“…This study aims to analyze the utilization of CPO in Indonesia so that Indonesian biofuels can be optimal in supporting the sustainable energy transition. Energy independence in Indonesia is also expected to be realized by the use of biofuels, so that it does not depend on fossil fuel diesel and reduces carbon emissions [13,14,15].…”

Risk Management for the Petrodiesel-Biodiesel Fuel Blend Supply Chain in Indonesia

“…Beyond uncertainties impacting supply chain resilience, challenges in biodiesel utilization also stem from the intricate supply chain network, which encompasses various interconnected layers from upstream to downstream [8]. Biodiesel is currently considered too intricate to serve as a direct replacement for fossil fuels, as indicated [9]. In enforcing compulsory biodiesel policies, Indonesia needs to tackle various aspects, including (i) biodiesel production costs, (ii) biodiesel quality, and (iii) stakeholder support.…”

Utilization of vanillin to prepare sulfated Calix[4]resorcinarene as efficient organocatalyst for biodiesel production based on methylation of palmitic acid and oleic acid

“…In general, palm oil contains 38–44% of palmitic acid, 40–43% of oleic acid, 9–12% of linoleic acid, and 3–5% of stearic acid [ 17 , 18 ]. The Indonesian government have decided to blend petroleum diesel with biodiesel derived from palm oil, named as B35 policy, since 2023 [ 19 ]. Therefore, extensive research on biodiesel technology is carefully examined to establish efficient biodiesel production using palmitic acid and oleic acid as the model compounds.…”