Singapore. The Singaporean government doesn’t consider Indonesia’s palm oil fuel policies as something that can smother the city-state with smog, citing that the problem lies in the land-clearing techniques.

In its latest report, Singaporean think-tank SIIA cautioned about the risk of transboundary haze from a biodiesel rush in Southeast Asia, warning that some growers might deliberately light fires to clear land for plantations. The report flagged Indonesia’s ambitious palm oil-based biodiesel rollout, although SIIA wrote that current production levels should suffice.

Asked about the warnings, Janil Puthucheary, Singapore’s senior minister of state for environment, didn’t want to point fingers at Jakarta’s biodiesel program.

“The risk of haze is not associated with biodiesel production even if there is a surge in demand,” Puthucheary recently told Indonesian journalists.

Singapore understands that Indonesia is trying to develop its economy by tapping its palm oil commodities.

“But what causes haze is the technique used to clear the land, whether it is for biofuel, palm oil, or something else. The issue is really how to prevent the use of fires and how to go upstream to mitigate the haze.”

According to Puthucheary, Indonesia is already making mitigation efforts, including through the so-called “canal blocking” of making sure the peatlands stay wet. 

He added: “Whether it’s for palm oil or biofuels, with attention and the right upstream efforts, land can be used productively for economic development while avoiding the risk of transboundary haze.” 

Smogs from Indonesian forest fires had previously led to diplomatic frictions with Singapore.

SIIA has warned ASEAN nations of severe regional haze for the remainder of 2026, expecting the conditions to peak between August and September. Puthucheary is confident that the two neighbors are now better prepared.

“The operational conditions this year are different. We have developed both institutional and business-to-business relationships. We have experience that we have learned from, as well as platforms for cooperation,” the politician explained.

Just last month, Indonesia and Singapore inked a memorandum of understanding (MoU) on environmental cooperation, including on keeping cross-border pollution under control. ASEAN has set up a regional command center in Jakarta to coordinate information exchanges.

The Prabowo Subianto administration is currently on fire with the biodiesel program, even more so after global oil prices surged following the US-Iran war. 

Indonesia has just raised the mandatory palm oil blend from 40% to 50% at the pump, a move better known as the B50.

Estimates run by the Indonesian Palm Oil Producers Association (Gapki) say that the annual demand for the B50 feedstock would be around 16 million tons. Indonesia needed over 12 million tons of palm oil each year for the 40% blend. The country reigns supreme as the world’s largest palm oil producer.

Prabowo is also betting on the B50 to cut dependence on fuel imports, a huge bulk of which have been coming from Singapore. This policy is expected to slash this year’s import bill by Rp 170 trillion (almost $9.5 billion), compared to the foreign exchange savings of Rp 133.3 trillion ($7.4 billion) from the previous B40 policy. 

At the B50 launch earlier this month, Prabowo admitted that he even had plans to raise the mandatory blend all the way to 100%.

“My ministers convinced me that we could already stop diesel fuel imports just by B50 alone,” Prabowo said at the time.