Indonesia Claims Progress in Turning Palm Oil Into Diesel and Gasoline
President Prabowo Subianto says Indonesian academics have developed technology to produce diesel and gasoline from palm oil. The announcement supports the government’s energy self-sufficiency agenda, but disclosed no capacity, costs, commercial timetable or additional palm-oil demand.
Domestic researchers develop palm-oil fuel routes
Indonesia has developed technology to turn palm oil into diesel and gasoline, President Prabowo Subianto said, presenting the research as a step toward greater national energy self-sufficiency. The claim potentially broadens the role of the country’s palm-oil industry beyond its established markets in food, oleochemicals and biodiesel, although no details were disclosed about production capacity, costs or commercial deployment.
Prabowo made the announcement on Saturday, September 19, 2026, during the centenary celebration of Pondok Modern Darussalam Gontor in Ponorogo, East Java, according to Sawit Setara. He credited professors and researchers at Indonesian engineering faculties with developing the technology. The president said palm oil could supply medicines, soap and fuels, describing the crop as strategically important because of its range of uses.
The statement did not identify the universities, research teams or companies involved. It also provided no information on the conversion process, fuel specifications, trial volumes, capital requirements or the date when output might become commercially available. The announcement therefore establishes the government’s technological ambition, but does not yet provide enough information to assess whether palm-derived gasoline or diesel could compete at industrial scale.
Existing mandates provide a policy foundation
Indonesia already uses palm-based biofuel through its biodiesel programme. Sawit Setara reported that the country has adopted B50, a diesel blend containing 50% biodiesel. This creates an existing policy and distribution framework for increasing the use of domestic renewable feedstock in road transport, though the newly discussed technology may involve a different production route from conventional biodiesel.
Use of renewable components in gasoline is less advanced. Bioethanol blending has begun on a limited basis in several regions at an E5 concentration, or 5% ethanol, the publication reported. Prabowo’s claim that gasoline can be produced from palm oil points to another possible route for replacing petroleum in the gasoline pool. However, the speech did not state whether the product would be blended with fossil gasoline or used as a direct substitute.
Prabowo also said Indonesia intends to make gasoline from coal. He placed both initiatives within a broader effort to process domestic resources into fuel and reduce reliance on external energy supplies. No timetable, project location or investment figure was given for the coal-based proposal.
Commercial scale will determine the palm-oil impact
For palm-oil producers and processors, the significance of the announcement will depend on whether the technology advances from research to sustained commercial production. A large transport-fuel outlet could create another source of domestic demand for palm feedstock, while competition with existing food, industrial and export uses would depend on the eventual volumes. Without capacity estimates or a rollout schedule, the potential effect on availability and pricing cannot yet be quantified.
The government’s energy strategy also intersects with sustainability policy. Sawit Setara said improvements in sustainable palm-oil practices need economic incentives, including market access and opportunities in new markets, so that investments by producers—especially smallholders—generate returns. If palm-derived transport fuels expand, feedstock standards, producer incentives and the distribution of value across the supply chain will become central commercial questions alongside technical performance.
