President Prabowo Subianto recently unveiled an ambitious roadmap aimed at bolstering Indonesia’s energy independence during a plenary session at the House of Representatives (DPR). However, the Institute for Essential Services Reform (IESR) has raised significant concerns, highlighting potential structural flaws and economic risks embedded in the president’s proposed strategy.
Addressing the ongoing energy crisis in the Middle East, President Prabowo emphasized the government’s push to accelerate the production of biodiesel derived from palm oil. Furthermore, the administration is actively exploring the feasibility of producing gasoline from the same source. “We are also set to produce diesel and gas from coal through gasification, and we have the potential to produce affordable cooking fuel using agricultural waste and corn stalks,” the President stated at the DPR building in Jakarta on Wednesday (May 20).
While the government’s move toward energy diversification is intended to shield the nation from the volatility of global fossil fuel markets, experts at the IESR argue that these solutions may carry hidden costs. Deon Arinaldo, Program Director of Energy System Transformation at IESR, warned that these proposals could strain the national budget without addressing the root causes of future energy crises.
According to Arinaldo, the reliance on palm oil and coal presents a paradox; these commodities are just as susceptible to global market fluctuations as traditional fossil fuels. Consequently, shifting toward these alternatives could impose a heavy financial burden on the state budget. Furthermore, he pointed out that these proposed substitutes are often more expensive than conventional energy sources, undermining the goal of achieving cost-effective energy security.
There is also a growing concern regarding the potential impact on food security. Utilizing agricultural waste for fuel could create a direct conflict between energy independence goals and national food self-sufficiency. “Increased demand for palm oil and corn waste for energy purposes threatens their availability for essential needs such as cooking oil production and animal feed—commodities that are vital for farmers and the broader public,” Arinaldo explained.
In light of these challenges, the IESR advocates for a more strategic pivot. Rather than doubling down on commodities susceptible to market instability, the organization urges the government to focus on systematically expanding the renewable energy mix. By prioritizing energy efficiency through widespread electrification across the transportation, industrial, and household sectors, Indonesia could build a more resilient and sustainable energy future that balances economic reality with long-term security.
Summary
President Prabowo Subianto has introduced an ambitious energy independence roadmap focused on scaling palm oil-based biodiesel, coal gasification, and fuel production from agricultural waste. While the administration aims to mitigate the impact of global fossil fuel volatility, the Institute for Essential Services Reform (IESR) warns that these strategies may impose significant burdens on the national budget. Experts argue that relying on commodities like palm oil and coal keeps the economy exposed to market fluctuations while potentially proving more expensive than traditional alternatives.
Furthermore, the plan raises serious concerns regarding national food security, as the diversion of agricultural resources for fuel could jeopardize the supply of essential goods like cooking oil and animal feed. Instead of these commodity-heavy approaches, the IESR recommends that the government prioritize renewable energy expansion and systemic electrification across industrial and transportation sectors. This alternative strategy is suggested as a more sustainable path to achieving long-term energy security without compromising domestic food production.
