Ecobiz.asia — Indonesia’s ambitious plan to expand palm oil-based biodiesel use in the shipping sector is facing a critical challenge beyond fuel supply and engine readiness: proving the fuel’s sustainability credentials under increasingly stringent international maritime emissions rules.
Speakers at a webinar on marine biodiesel utilization held on Wednesday (June 3, 2026) said Indonesia already has strong domestic policy support, industrial capacity, and biodiesel supply. However, demonstrating credible lifecycle emissions performance that can be internationally recognized remains the biggest hurdle.
Indonesia, the world’s largest palm oil producer, currently implements a mandatory B40 biodiesel blending policy and plans to increase the blend to B50 in the second half of 2026 as part of efforts to reduce diesel imports and strengthen energy security.
Extending biodiesel use into the maritime sector, however, means complying with evolving decarbonization regulations set by the International Maritime Organization (IMO).
BKI Director of Classification Arief Budi Permana said green shipping should not be viewed solely as an environmental issue, but as part of a broader transformation affecting regulation, operational efficiency, safety, and industry competitiveness.
“Green shipping can no longer be seen merely as an environmental agenda,” Arief said. “Biodiesel must be assessed not only from the perspective of fuel availability, but also from technical, operational, and safety aspects.”
Aditya Trisandhya Pramana, Vice President for Statutory Affairs at BKI, said the IMO is shifting its regulatory focus from ship efficiency toward fuel emissions intensity.
He explained that existing measures such as the Energy Efficiency Design Index (EEDI), Energy Efficiency Existing Ship Index (EEXI), and Carbon Intensity Indicator (CII) are now being complemented by the Greenhouse Gas Fuel Intensity (GFI) standard.
“CII asks how efficiently a ship operates. GFI asks how low the emissions of the fuel it uses are,” Aditya said. “CII focuses on the ship, while GFI focuses on the fuel from its source to its end use.”
According to him, the key distinction lies in the “well-to-wake” approach applied under GFI, which calculates emissions throughout the fuel’s entire lifecycle, including land use, production, transportation, and combustion.
Aditya said Indonesia’s planned B50 biodiesel could potentially help shipowners maintain or improve their CII ratings, although the actual benefits would depend on emission calculation methodologies and emission factors eventually recognized by the IMO.
Meanwhile, Head of the Sub-Directorate for Ship Measurement, Registration and Nationality at Indonesia’s Directorate General of Sea Transportation, Mifthakul Hadi, said the government has continued strengthening the domestic regulatory foundation for maritime decarbonization.
He noted that Indonesia has issued a ministerial decree outlining ten strategic steps for green shipping development, including fleet modernization and the expansion of onshore power systems at ports.
However, he acknowledged that the greater challenge lies in securing international acceptance of Indonesia’s palm oil-based biodiesel under global sustainability standards.
“Because our biodiesel is palm oil-based, the calculation begins from the moment forest land is converted into oil palm plantations,” Mifthakul said. “That is where deductions to our emissions performance are calculated.”
He said the lifecycle emissions debate has made Indonesian palm-based biofuel a subject of resistance, particularly in the European Union, which already applies emissions trading requirements to ships entering its ports.
Indonesia, he added, continues advocating for a single global regulatory framework under the IMO rather than fragmented regional standards.
“We support one global framework, one rule applied equally to all countries,” he said.
Since 2024, Indonesia has submitted technical documents on its biodiesel lifecycle emissions performance to the IMO and involved academic institutions in building scientific evidence supporting the sustainability of its marine biofuel.
The urgency of the issue has increased amid uncertainty surrounding the IMO’s Net-Zero Framework, which includes the proposed GFI standard.
Although the framework was approved during the IMO Marine Environment Protection Committee (MEPC) 83 meeting in April 2025, its formal adoption was delayed for one year during an extraordinary session in October 2025 due to disagreements among member states.
Negotiations resumed during MEPC 84 in April 2026 but again failed to produce consensus, with further discussions expected later this year.
Despite the uncertainty, speakers agreed that Indonesia has the industrial capacity and feedstock required to become a major supplier of low-carbon marine fuel, provided it can establish internationally credible sustainability verification.
“The goal is for Indonesia to become not only a user of low-carbon fuel, but also part of the solution for decarbonizing the global shipping sector,” Aditya said. ***
