Indonesia Eyes Palm Oil Jet Fuel To Advance Green Economy And Energy Security

Nusa Dua, Bali, Indonesia – At the 21st Indonesia Palm Oil Conference (IPOC), a key forum for global industry stakeholders, senior officials outlined Indonesia's forward-looking energy vision. Coordinating Minister for Economic Affairs Airlangga Hartarto declared the government's plan to develop Sustainable Aviation Fuel (SAF) using palm oil as a primary feedstock. This initiative is positioned as a critical next step in the nation's comprehensive biofuel roadmap, directly addressing the environmental impact of aviation and strategic vulnerabilities caused by importing fossil-based jet fuel.

The push for domestic SAF production is a strategic response to a growing dependency. Indonesia's consumption of aviation turbine fuel (avtur) has risen steadily, climbing from 3.53 million kiloliters in 2010 to 5 million kiloliters in 2023. To meet this demand, imports of fossil avtur have surged, with their value skyrocketing from USD 95.1 million to USD 1.08 billion over a similar period, straining the national balance of payments. Developing a homegrown SAF industry from abundant palm oil resources is seen as a vital measure to curb this import dependence and shield the economy from volatile global fuel markets.

From an environmental standpoint, the shift to SAF is imperative. The aviation sector is a notable contributor to global greenhouse gas emissions, accounting for approximately 2.3% of the total. International agreements and carbon offset schemes, such as the ICAO's CORSIA, are compelling airlines worldwide to seek lower-carbon alternatives. Palm oil-based SAF, when produced under certified sustainable conditions, offers a pathway to significantly reduce the carbon footprint of flights. Research indicates that SAF can lower lifecycle emissions by between 36% and 85% compared to conventional jet fuel, aligning Indonesia's transport growth with its climate commitments.

This national project builds upon a legacy of innovation in palm oil bioenergy. Indonesia already operates one of the world's largest biodiesel programs, with B40 (a 40% palm oil blend) successfully reducing fossil fuel imports and emissions. The technical know-how from biodiesel is now being channeled toward aviation. Previous milestones include a successful test flight in 2021 using a bioavtur blend, proving the technical viability of palm oil-derived fuel for aircraft engines. The new plan involves strategic industrial cooperation, such as the partnership between PT Pindad and the BPDP, to develop production facilities.

Acknowledging global scrutiny on palm oil, Indonesia is reinforcing its sustainability frameworks to ensure the environmental integrity of its SAF. The government has strengthened the mandatory Indonesian Sustainable Palm Oil (ISPO) certification through a new Presidential Regulation and is developing a digital traceability system. These measures are designed to provide verifiable proof that palm oil destined for fuel meets strict standards against deforestation and environmental harm, which is crucial for gaining acceptance in international markets that are increasingly regulated by policies like the EU's Deforestation Regulation (EUDR).

The economic rationale for this venture is deeply interwoven with the health of Indonesia's palm oil sector, which supports millions of livelihoods. By creating a new, high-value domestic market for palm oil through SAF, the government aims to stabilize prices for farmers, generate advanced manufacturing jobs, and capture more economic value from the commodity chain. This downstream industrialization is central to the economic policy of hilirisasi, which seeks to transform Indonesia from an exporter of raw materials into a producer of finished goods.

Minister Airlangga has provided a tangible timeline for this bioenergy expansion, indicating that the implementation of broader biofueling, which encompasses such advanced products, is targeted for the second half of 2026. This progression will be supported by ongoing efforts to increase palm oil productivity and manage land use effectively to meet the rising demand from both traditional and new energy markets.

The plan to produce jet fuel from palm oil represents a sophisticated fusion of industrial, energy, and climate policy. It demonstrates Indonesia's intent to leverage its natural resources not just for economic growth, but to actively participate in solving global environmental challenges. The journey from plantation to wing tank is complex, but with a clear strategic vision, reinforced sustainability pledges, and a history of biofuel success, Indonesia is preparing for takeoff in the global market for sustainable aviation fuel.

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Tag: Biofuel Policy Carbon Reduction Energy Security Green Aviation Indonesian Economy Palm Oil Downstreaming