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Toward an Optimized Biofuel Use Pathway for Indonesia Road Transport

In: The Handbook of Energy Policy

Author

Listed:
  • Alloysius Joko Purwanto

    (Economic Research Institute for ASEAN and East Asia (ERIA))

  • Dian Lutfiana

    (Economic Research Institute for ASEAN and East Asia (ERIA))

Abstract

Biofuels can partially substitute for fossil fuel–based petroleum to power existing vehicles and engine technology. The Government of Indonesia recognizes biofuels’ significant role in road transport and in reduction of fuel imports and greenhouse gas emissions. With its abundant biofuel feedstock, especially crude palm oil, and its 30% mandatory biodiesel blend in diesel fuel for road transport, Indonesia leads in biodiesel use. Progress, however, is not without challenges, difficulties, and risks. The study reviews biofuel development in Indonesia and presents a framework for a pathway that will optimize the sustainable penetration level of biofuels by 2040. The framework is based on international experience, stocktaking of Indonesia’s situation, and impact assessment results of long-term scenarios. The framework covers (i) biofuels’ role in energy transition, (ii) gasoline’s share in road transport, (iii) avoidance of conflict with food production, (iv) the potential of selling biofuel as an alternative transport fuel product, (v) the limited capacity of crude palm oil production, and (vi) a financing strategy.

Suggested Citation

  • Alloysius Joko Purwanto & Dian Lutfiana, 2023. "Toward an Optimized Biofuel Use Pathway for Indonesia Road Transport," Springer Books, in: Farhad Taghizadeh-Hesary & Dayong Zhang (ed.), The Handbook of Energy Policy, chapter 20, pages 555-586, Springer.
    • Handle: RePEc:spr:sprchp:978-981-19-6778-8_26
    DOI: 10.1007/978-981-19-6778-8_26
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