Indonesia Plans Palm Oil-Based Sustainable Aviation Fuel (SAF) As Next Stage In Bioenergy Push

Bali, Indonesia – Indonesia is setting its sights on the skies for the next phase of its national bioenergy strategy. Coordinating Minister for Economic Affairs Airlangga Hartarto has unveiled plans for the country to develop Sustainable Aviation Fuel (SAF) derived from palm oil. This initiative represents a significant advancement beyond the nationally mandated biodiesel program, aiming to tackle carbon emissions in the aviation sector while further reducing dependence on imported fossil fuels. The announcement positions palm oil, a cornerstone of Indonesia's economy, as a key resource in the global transition toward greener air travel.

The plan for palm oil-based SAF is framed as the natural progression following the success of Indonesia's biodiesel programs, including B30 and the ongoing implementation of B40. Minister Airlangga emphasized that the country should not stop at exporting raw materials but must pursue downstream industrialization, or hilirisasi, to increase added value, create jobs, and strengthen domestic industry. The SAF initiative is a direct embodiment of this strategy, seeking to transform a premier agricultural commodity into a high-value, clean energy product for a critical global industry.

This move is driven by compelling economic and environmental imperatives. Indonesia's aviation sector is vital for its archipelagic nation, but growing demand has led to increased reliance on imported fossil-based jet fuel, creating a significant financial outflow and vulnerability to global price shocks. Concurrently, international aviation bodies like the International Civil Aviation Organization (ICAO) are pushing for carbon reduction, with SAF being a primary tool to achieve these goals. Domestic palm oil-based SAF offers a dual solution: curbing import bills and helping the aviation sector lower its carbon footprint, with studies indicating SAF can reduce emissions by 36% to 85% compared to conventional jet fuel.

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The technical pathway for this bioavtur is already under exploration. A notable pilot project involves a collaboration between state-owned defense company PT Pindad and the Palm Oil Plantation Fund Management Agency (BPDP) to develop production facilities for the defense industry that will utilize local resources, including palm oil-based materials. This builds upon earlier national research and development successes, such as the 2021 test flight of a CN235 aircraft using a 2.4% blend of bioavtur (J2.4) made from refined palm kernel oil, which demonstrated performance equivalent to fossil-based fuel.

Ensuring the sustainability and global market acceptance of this palm oil-derived fuel is paramount to the plan's success. The Indonesian government is reinforcing the Indonesian Sustainable Palm Oil (ISPO) certification scheme through Presidential Regulation Number 16 of 2025 to guarantee that palm oil meets environmental and global standards. Furthermore, officials are developing an ISPO Information System to digitally connect plantation data, certification, and trade, enhancing supply chain transparency and enabling real-time product traceability.

The economic context for this ambitious plan is robust. The palm oil sector is a primary driver of Indonesia's trade surplus, contributing USD 4.34 billion as of September 2025. With export volumes from January to September 2025 reaching 28.66 million tons—an 11.26% year-on-year increase—and prices remaining favorable for smallholders, the industry has a strong foundation to support new downstream ventures like SAF. This initiative aims to lock more economic value within the country by converting raw exports into manufactured, strategic energy products.

Looking ahead, the government has signaled a clear implementation timeline. Minister Airlangga stated that Indonesia plans to begin applying broader biofueling, which includes advancing such downstream products, in the second half of 2026. This follows the ongoing B40 program, which has already delivered substantial national benefits by reducing fossil fuel imports by over 15.6 million kiloliters and cutting greenhouse gas emissions by approximately 41.46 million tons of CO? equivalent since 2024.

The announcement to pursue palm oil-based SAF marks a bold step in Indonesia's energy and industrial policy. By leveraging its agricultural strength to address a modern environmental challenge, Indonesia is not only seeking greater energy autonomy but also aiming to secure a place in the future of sustainable global aviation. The success of this venture will depend on continued technological development, stringent sustainability governance, and strategic partnerships to bring this vision for cleaner skies to fruition.

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Airlangga Hartarto Aviation B40 Bioavtur Biofuel Indonesia Palm Oil SAF Sustainable Aviation Fuel