Biodiesel implementation in Indonesia: Experiences and future perspectives

Indonesia leads the world in biodiesel usage, with B35 (a mixture of 35 % biodiesel and 65 % diesel fuel) as its nationwide standard. The success of biodiesel program is primarily influenced by factors such as encompassing supply, demand, regulatory frameworks, economic considerations, and environmental impact. This comprehensive study delves into Indonesia's biodiesel program, drawing insights from practical experiences and recent research findings. Additionally, it puts recommendations aimed at ensuring the long-term sustainability of biodiesel program. The economical feasibility of mixed biodiesel and diesel fuel (Bxx) depends on the scheme and formula for determining the Biodiesel Market Index Price in Indonesia. Exploiting the emission advantage of biodiesel within “polluter pays” principle could potentially position it as a compelling alternative to conventional diesel fuel. The discussion focuses on the establishment of a carbon tax and the internalization of the external cost of using biodiesel as part of energy policy. In summary, this review provides a reference for other countries that are either in the initial stage of starting or considering the implementation of a biodiesel utilization program in their countries and identifies the existing gaps in the further development of sustainable fuels.