Research Brief: IEA — Biodiesel Cuts Indonesia’s Diesel Import Dependency by Up to 35%

Jakarta — The International Energy Agency (IEA) estimates that biodiesel reduced Indonesia's diesel import dependency by up to about 35% in 2025. In its ASEAN Energy Security Review, published on 15 October 2026, the agency also finds that Indonesia contributed roughly 75% of ASEAN's growth in liquid biofuel demand since 2010. However, the outlook still rests on B40 and says further progress towards B50 is constrained by production capacity, even though the Indonesian government launched B50 in July 2026.

Key findings

• Demand increased more than twelvefold. ASEAN liquid biofuel demand rose from just over 25 thousand barrels per day in 2010 to more than 360 thousand barrels per day in 2025. Biodiesel accounted for 85% of that increase, according to the chart on page 31.
• Indonesia was the main driver. The IEA calculates that Indonesia contributed around 75% of regional demand growth since 2010, linking the increase to the strengthening of its biodiesel mandate from B1 in 2009 to B35 in 2023.
• Effect on import dependency. Page 32 estimates that biodiesel reduced diesel import dependency by around 5% in Thailand, 10% in Malaysia and up to 35% in Indonesia in 2025. The figure compares actual conditions with a counterfactual scenario without biofuels.
• Regional demand is projected to grow 50%. The IEA expects ASEAN liquid biofuel demand to rise from more than 360 thousand barrels per day in 2025 to over 550 thousand barrels per day in 2030. Biodiesel is projected to account for about 75% of the additional growth.
• Sustainability is a condition for expansion. On page 33, the IEA says robust sustainability frameworks are needed so emissions reductions can be verified and energy-security gains do not cause adverse impacts on land, water or biodiversity.

Method in brief

The report was prepared by the IEA's Energy Markets and Security Directorate with its global relations office and Regional Co-operation Centre in Singapore. It was co-ordinated with the ASEAN Centre for Energy, the ASEAN Secretariat and member states. The oil and biofuels chapter was led by David Martin, Cuauhtemoc Lopez-Bassols and Alara Kocabas.

For import dependency, the IEA includes net imports of oil products, crude oil used for domestically refined products, biofuels and biofuel feedstocks. This total is divided by combined consumption of oil products and biofuels. Its counterfactual assumes that all biofuel consumption in 2025 is directly replaced with imported oil products. Data and projections draw on sources including World Energy Balances, Oil 2025 and the then-forthcoming Renewables 2026.

Limitations and comparison figures

• Stated in the report: the five-dimensional framework—supply security, demand readiness, price risk, system resilience and emergency preparedness—is an analytical lens, not a quantitative measurement tool applied mechanically. Some 2025 data are also estimates.
• Editor's note: the 35% reduction in import dependency is a counterfactual result. It is not a customs record of import volumes actually cancelled and cannot be equated directly with foreign-exchange savings.
• Editor's note: the page 33 outlook still refers to B40 and says further progress towards B50 is limited by production capacity. Indonesia's Ministry of Energy and Mineral Resources (ESDM), by contrast, launched B50 on 9 July 2026 and put biodiesel requirements at 16.7–18 million kL. By mid-September, B50 had reached 6,050 of 6,412 fuel stations, or about 94%.
• Editor's note: the US Department of Agriculture projects Indonesia's 2026 biodiesel nameplate capacity at 22 billion litres and output at 17.6 billion litres. The IEA report does not reconcile its capacity assessment with the USDA figures or implementation reported by the Indonesian government.
• Editor's note: the report highlights risks to land, water and biodiversity, but the biodiesel chapter does not provide an Indonesia-specific calculation of land-use change or B50 life-cycle emissions.

What it means for B50 and B60 policy

The IEA finding gives quantitative support to the energy-security case for biodiesel: domestic blending can reduce Indonesia's exposure to imported diesel. The scale of the benefit, however, depends on definitions and assumptions. The IEA model includes imported biofuel feedstocks and crude oil used by domestic refineries, making it broader than a simple comparison of diesel import volumes before and after a mandate.

For the B60 debate, the report is more useful as a methodological warning than as a roadmap. A higher blend should not be judged only by plant capacity and avoided imports. Transparent assessment also requires actual production data, support costs, crude palm oil supply, fuel-quality results, and land and emissions indicators to compare B60's incremental benefits with its costs.