Indonesia Advances Sustainable Aviation Fuel with Used Cooking Oil Export Tax Revenue
Indonesia has commenced commercial flights using sustainable aviation fuel (SAF) made from used cooking oil, marking the country's first domestic SAF flight. State-owned PT Pertamina is co-processing this biofuel at its refineries and aims to boost production capacity, supported by a 9.5% export tax on used cooking oil. The initiative seeks to enhance domestic biofuel production and achieve a 1% SAF blending target by 2027, leveraging revenue from the export tax.
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In August 2025, Indonesia began using sustainable aviation fuel (SAF) derived from used cooking oil for commercial flights between Jakarta and Bali. This marks the first domestic flight utilizing SAF in the country.
State-owned oil company PT Pertamina is co-processing this fuel at its Cilacap refinery and plans to expand production capacity at its Dumai and Balongan refineries. Pertamina's sustainable biofuel has been certified by the International Sustainability & Carbon Certification and meets the European Union's Renewable Energy Directive and CORSIA criteria.
The government aims to support domestic biofuel production through an export tax on used cooking oil, which has been set at 9.5%. Studies suggest establishing a separate fund to manage this revenue could help increase domestic biofuel production and meet the target of blending 1% SAF by 2027. Current export levels exceed 200,000 tons per year, and with appropriate tax incentives, the program could enhance sustainable aviation initiatives in Indonesia.
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