Formulating a Long Term Strategy for Sustainable Palm Oil Biodiesel Development in Indonesia: Learning from the Stakeholder Perspective

Abstract

Indonesia, the largest producer of palm oil, has been developed palm oil biodiesel as renewable energy in the last decade. Indonesia biodiesel development policies aim to increase domestic value added of palm oil product and reduce the reliance on fossil fuel. Indonesia has embarked on a comprehensive palm oil biodiesel program since 2006 and targeted the 20% biodiesel blend (B20) in 2016. This article explores the strategy formulation by accommodate the stakeholder perspective in the problems and the solutions. This research analyzes the information from in depth interview with biodiesel stakeholders (government, industry and researcher) in Indonesia by combine Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis with a Multi Actor Analysis approach. The results show the problems of biodiesel development are mainly on the high production cost due to high price of raw material, production technology and distribution infrastructure. The government policy, technology development and raw material supply are the driving forces of the biodiesel development in Indonesia. In the long term strategy, government of Indonesia should secure the biodiesel raw material, develop an environmental friendly technology in biodiesel processing, and accommodate any improvement idea from other stakeholders.