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Energy production and consumption are crucial for the economic growth of all countries (Darrian et al., 2023; Komarova et al., 2022). Currently, fossil fuels dominate the final energy consumption in Indonesia (Bimanatya and Widodo, 2018). However, since fossil energy sources are non-renewable, their availability is declining (Ngarayana et al., 2021). It is anticipated that future growth in the energy sector will lead to a transition towards renewable energy, where Indonesia aims to achieve a 44% renewable energy share by 2030 as part of the Just Energy Transition Partnership (JETP) investment plan (IEEFA,2024). This transition can help mitigate greenhouse gas emissions, minimise the impact of extreme weather and climate, and ensure a reliable, timely, and cost-effective energy supply (Kabeyi & Olanrewaju, 2022; Kılkış et al., 2022; Umeh et al., 2024).

As a large country with abundant natural resources, Indonesia has experienced an increased demand for renewable energy in line with rising consumption (Erdiwansyah et al., 2021; Langer et al., 2021). Biodiesel, one of the common types of biofuel, is often considered carbon neutral because the carbon dioxide (CO2) released during its combustion is offset by the CO2 absorbed by the plants used to produce it (Srivastava et al., 2021). Plants such as soybeans, palm oil, and canola absorb CO2 from the atmosphere as they grow, which helps to balance out the emissions produced when biofuel is burned(Yan, 2016).

The Indonesian government has been increasing biofuel use to enhance the national energy mix and reduce reliance on fuel imports. Since 2008, Indonesia has started to blend 1-1.5% biofuel (B1-B1.5) for transportation, industry, and power plants. Later, the mandate was increased to B10 for public transport in 2014, B20 in 2016, and B30 in 2020 (Saputra et al., 2021). Finally, in 2023, the government mandated the implementation of B35 in response to global uncertainty about crude oil prices (Wirawan et al., 2024).

In 2022, Indonesia introduced the ambition plan to achieve net zero emissions by 2060 in the Enhanced Nationally Determined Contribution (ENDC), as part of its Second NDC (SNDC), aligned with the Long-Term Low Carbon and Climate Resilience Strategy (LTSLCCR) 2050. In the energy sector, biofuel production targets include 400,000 KL Fatty Acid Methyl Ester (FAME) in B10 under the Business-As-Usual (BAU) scenario, 18 million KL FAME in B40 under unconditional reduction (CM1), and further enhanced renewable energy (RE) utilisation with international support (CM2) (Ministry of Environment and Forestry, 2022). The optimism continues with the government prioritising the B50 biofuel program targeted for 2029, along with accelerating decarbonisation to meet net-zero goals as part of their green economy agenda. Palm oil will remain the primary feedstock for biofuel production.