1 The Current Status and Prospects of Biodiesel Development in Indonesia: a review 1

Energy consumption in Indonesia increases rapidly in line with economic and population growth. Currently, Indonesia is very much dependent on fossil fuel for its energy source. Data of fossil energy reserves from Department of Mine and Energy Resources shows that around 63 % of the Indonesian’s final energy demand still depend on oil, on the other hand the national oil production facilities is limited and the capacity decreasing gradually. Therefore, to satisfy domestic energy consumption, Indonesia still has to import crude oil and finished petroleum products, such as gasoline and diesel fuel. Indonesia becomes very dependent on overseas oil supply to fulfill the increasing demand. The increase of the international crude oil and fuel price may worsen the security of fuel supply. Developing biofuel is a must for Indonesia due to various reasons including the abundance availability of raw material, an alternative renewable fuel to strengthen the country energy security and a solution to improve local air pollution in several Indonesian major cities. One alternative is converting plant oil to methyl esters or famously called biodiesel. This paper gives a review of the background, historical, current and future development of biodiesel in Indonesia. It also highlights the prospects, opportunities and challenges lie ahead to accelerate the biodiesel commercialization program