Jakarta. Indonesia has the potential to generate up to $8 billion in annual export revenue from low-carbon fuels, leveraging its vast natural resources and strategic location, according to an energy expert speaking at the Jakarta Geopolitical Forum on Tuesday.

Thomas Wagner, head of the Energy Working Group at the European Business Chamber of Commerce (Eurocham) in Indonesia, said the country should begin developing its low-carbon fuel capacity now -- rather than waiting for ideal market prices or political conditions -- as the opportunity lies in growing global demand and regulatory incentives.

"Renewable resources are not limited, so there is no reason to wait until it gets the right price or the right political situation," Wagner said during a forum session livestreamed by the Energy and Mineral Resources Ministry.

Export Potential in Biofuels and Low-Carbon Petrochemicals
Indonesia’s export prospects in the low-carbon energy space include sustainable aviation fuel, e-ammonia, bio-LNG, biomethanol, biomethane, and other products derived from renewable electricity. These are increasingly in demand in global markets seeking to cut emissions and meet climate targets.

Wagner pointed to Indonesia’s palm oil industry as a major untapped source of biomass. “The theoretical potential is about 280 million MMBTU a year if we include biomethane from empty fruit bunches, not only affluent biomass. That's equivalent to 8 million tons of biomethanol or 4-5 million tons of bio-LNG,” he said.

"These are massive figures. The gross export potential could range from $4 billion to $8 billion annually," Wagner added.

While Indonesia may not be the most cost-effective location for e-ammonia production -- with countries like Australia and the Middle East offering cheaper hydrogen -- it remains highly competitive in other low-carbon fuel categories.

Strategic Advantages and Infrastructure
Wagner noted that Indonesia already has the infrastructure to support such exports, including LNG terminals in Bontang, East Kalimantan, and methanol production facilities.

He also highlighted the geographic advantage of Indonesia’s proximity to the Strait of Malacca, one of the world’s busiest shipping lanes and the largest maritime refueling hub.

“International Maritime Organization (IMO) and EU emission targets can be met by refueling with low-carbon fuels in the Strait of Malacca, for example in Dumai if the fuel is there,” he said.

Indonesia could also deliver biomethane via pipeline to nearby markets such as Singapore, taking advantage of biomass availability in Sumatra.

However, Indonesia is not alone in this opportunity. Malaysia, on the other side of the Strait of Malacca with similar access to biomass in Sabah and Sarawak, and comparable export facilities, is also well-positioned to tap into the same regional and global markets.

While Indonesia's domestic market has yet to support premium pricing for renewable fuels, international mechanisms provide strong incentives. Wagner cited the IMO's net-zero program and the EU's maritime emissions regulations, which impose steep penalties on non-compliant fuels.

He also pointed to Japan's plan to replace up to 90 percent of its natural gas with renewable gas, and South Korea's open tenders for low-carbon hydrogen, which offer significant incentives.

“The question is, how Indonesia can build production facilities to profit from these incentives elsewhere with sustainable production in Indonesia,” Wagner said.

He stressed that exporting clean energy is not a new concept. Earlier this month, Indonesia and Singapore signed several memorandums of understanding on cross-border renewable energy trade and sustainable industrial zones in the Riau Islands.

“The longer we wait, the more we miss out. Use the resources to generate exportable goods, use internationally available incentives to get a premium price on these renewable goods, and then have all that infrastructure and production facility available as soon as there is demand domestically,” Wagner said.

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