Political Economy Policy in the Context of Renewable Energy through Biodiesel Development in Indonesia

Abstract

Abstract. In Indonesia, the policy of using fossil fuels to non-fossil fuels (including biofuel biodiesel) continues to increase. Currently, the largest source of raw material for biodiesel in Indonesia comes from palm oil. It is believed that biodiesel development can generate benefits for the community in each region, such as local job creation, infrastructure development, revenue generation for local governments and less national dependence on fossil fuels and energy imports, as well as minimizing the negative impact of fossil fuels on the environment. The results of this study indicate that the limited domestic market, especially due to the uncompetitive price of diesel fuel, low diesel prices and high prices are constraints in the production of domestic biodiesel for absorption. Domestic political aspects related to the use of biodiesel by parties that have been determined by the government are also an important issue in ensuring the sustainability of biodiesel. In addition, the issue of sustainability in the upstream (oil palm plantations) and the dumping problem stated by the European Union and American Governments are also major problems in Indonesia's biodiesel export.