Jakarta, INTI - Rising tensions in the Middle East, triggered by US and Israeli strikes on Iran, continue to exert pressure on global energy markets.

As of Tuesday, March 24, 2026, oil prices remained unstable, hovering above US$100 per barrel for Brent crude. This volatility is largely driven by concerns over possible supply disruptions through the Strait of Hormuz, a crucial corridor for global oil transportation.

In response, many countries are intensifying efforts to improve energy efficiency, diversify energy sources, and accelerate the adoption of renewable energy.

President Prabowo Subianto described the situation as a ‘blessing in disguise’, noting that despite its challenges, it compels Indonesia to accelerate its journey toward food and energy independence.

The crisis also presents an opportunity for Indonesia to expand the utilization of renewable energy derived from its abundant domestic resources. Transitioning to renewable energy is seen as a strategic move to reduce reliance on fossil fuels while supporting climate change mitigation efforts.

Energy diversification allows the country to maximize multiple energy sources, strengthening resilience within the national energy system. Clean energy development is therefore positioned as a key solution to address current challenges while ensuring long-term sustainability.

Indonesia possesses vast renewable energy potential, including solar, wind, hydro, geothermal, and biomass resources. Additionally, organic waste from agriculture, plantations, and forestry can be converted into sustainable energy through appropriate technologies.

However, these resources remain underutilized, as renewable energy currently accounts for only around 15.75% of the national energy mix.

To address this, the government has set a target of increasing the renewable energy share to between 17% and 21% by 2026. President Prabowo has appointed Bahlil Lahadalia to lead the National Energy Transition Acceleration Task Force, ensuring faster and more precise policy implementation.

The task force is prioritizing clean energy initiatives, including a 100-gigawatt solar power program, with a strong focus on accelerating installations in schools and rural areas.

Although Indonesia has enormous solar potential estimated at 3,217 GW, actual utilization remains relatively low. To bridge this gap, the government is prioritizing investments in green infrastructure.

Efforts are also underway to expand large-scale solar projects in remote regions, ensuring equal access to clean energy across the country.

Other key initiatives include promoting electric vehicle adoption and expanding bioenergy programs such as biodiesel and bioethanol to reduce dependence on imported fossil fuels.

Indonesia’s geothermal sector, with a capacity exceeding 2.6 GW, continues to serve as a vital pillar of the country’s sustainable energy system.

Fuel Blending Policies 

The surge in oil prices has also pushed the government to accelerate biodiesel blending policies. One of the key initiatives is the planned B50 program, which combines 50% crude palm oil (CPO) with 50% fossil diesel.

While the B50 policy is still under review, Indonesia continues to implement the B40 mandate, which blends 40% palm-based biofuel with 60% diesel. These blending strategies play an important role in maintaining national energy security.

According to Coordinating Minister for Economic Affairs Airlangga Hartarto, transitioning to B50 requires comprehensive evaluation, particularly regarding price differences between fuel oil, diesel, and palm oil in both domestic and global markets.

The government aims to implement B50 within the year, supported by ongoing technical studies and automotive trials, while closely monitoring market conditions and industry readiness across the supply chain.

Hartarto emphasized that continuous assessment of price differentials is necessary to ensure the policy remains balanced, secures energy supply, and supports economic stability. He also noted that the success of B50 will depend heavily on a stable supply of CPO.

Meanwhile, Tungkot Sipayung stated that Indonesia has sufficient experience to implement B50, supported by the well-established B40 ecosystem. He highlighted that Indonesia currently has the highest biodiesel blending rate globally and ranks as the third-largest biodiesel producer after the EU and the US.

Indonesia has implemented biodiesel mandates since 2009, starting with a B1 blend. The expansion to B40 has already delivered significant economic benefits, including reducing fuel imports and saving an estimated $9.3 billion in foreign exchange by 2025.

He added that the national biodiesel production capacity of around 22.5 million kiloliters is sufficient to support B50 implementation. The availability of CPO feedstock is also considered adequate, with projected production reaching approximately 57 million tons in 2025.

However, increasing domestic CPO allocation for biodiesel may reduce export volumes in the short term, a trade-off that requires careful policy consideration.

In addition to biodiesel, the government plans to introduce a 20% bioethanol blend (E20) in gasoline by 2028 to further reduce fuel imports.

To support this initiative, the Energy Ministry plans to begin bioethanol production in 2027 in Merauke, South Papua. Derived from plant-based sugars through fermentation, bioethanol is part of Indonesia’s broader strategy to strengthen energy security and support global clean energy goals.

The program is linked to the government’s food estate initiative, which includes the development of 500,000 hectares of sugarcane plantations, inspired by Brazil’s success in producing renewable energy from sugarcane.

To improve competitiveness, the government is also working to simplify licensing and provide excise exemptions for fuel-grade ethanol. Currently, high excise duties remain a key barrier, making it less competitive compared to fossil fuels.

Accelerating these incentives is crucial to lowering bioethanol costs and encouraging wider adoption.

Ultimately, renewable energy is not only a solution to mitigate the impact of global energy crises but also a long-term strategy for sustainable development. The transition to cleaner energy should become a shared commitment to protect the environment and ensure a better future for the next generation.

Conclusion 

Indonesia’s response to rising global energy uncertainty highlights the critical role of renewable energy in strengthening national resilience. By accelerating the energy transition, expanding green infrastructure, and optimizing domestic resources, the country is not only reducing dependence on fossil fuels but also positioning itself for sustainable long-term growth. As global challenges persist, Indonesia’s commitment to clean energy development will be key to ensuring energy security, economic stability, and environmental sustainability.

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