Indonesia Is Pursuing the Worst Form of Solar Power

Biofuel mandates are boosting the use of palm oil. Going electric would be a better solution.

- David Fickling

While the rest of the planet is catching on to the realities of energy, Indonesia is pursuing the most inefficient form of solar power — one that uses millions of hectares of land, is plagued by volatile supplies and hides a dark legacy of environmental destruction behind its renewable image.

We're talking about palm oil. The red grease is ultimately solar energy, soaked up by trees and converted into fatty fruit that can be crushed and refined into biodiesel. For all the angst about palm oil in cosmetics or confectionery, and its effect on endangered orangutans and tiger populations, by far the biggest use is as Indonesian fuel.

Some 13.6 million tonnes will be blended into the country's diesel in 2025. That's more than the total consumption in the European Union and China put together, and about one-sixth of the global crop. Outside Indonesia, palm oil consumption has fallen by about 5.3 percent since 2019. Locally, it's jumped by three-quarters.

This is the result of policy, rather than economics. The Indonesian government in 2022 dedicated more than a fifth of its spending to fuel subsidies — more than it spent on healthcare — with the majority going to support wealthier consumers and fossil fuels. Palm oil has been a major beneficiary. In 2008, Jakarta required refiners to blend a 2.5 percent mix of biofuel into their diesel, but that mandate has risen drastically as demand from the rest of the world declined. It's currently 40 percent, with a target of 50 percent in 2026.