Recently, Indonesia is arranging the production and consumption of national energy. This is to anticipate the scarcity of conventional energy resources and the boost of oil price in the international market.

To realize the providing and utilization of continuous energy system, Indonesia unites the optimizing concept of renewable energy utilization. That is the use of efficient energy technology and socialized the conserving energy life style, or known as Green Energy. This step is consistent with the international agenda of continuous development (World Summit on Sustainable Development) in Johannesburg South Africa, September 2002.

In the plan of national energy development strategy, the renewable energy development for bio-diesel will be carried out in 25 years, starting with the preparation in 2004 and the execution since 2005. During the 25 years period, Indonesia divided into three bio-diesel development phases. In the first phase 2005 – 2010, minimum utilization of bio-diesel is 2% or equivalent to 720.000 kilo liter to fulfill the national oil fuel needs. Products that can fulfill this came from castor-oil and palm oil plant. In the second phase (2011 – 2015), the continuance of the first phase, but it has extended to other plant and the use of ethanol producing materials. The factory built was aiming at the commercial scale with the capacity of 30.000 – 100.000 tons per year. This production is able to cover 3% of diesel consumption or equivalent to 1,5 million kilo liter. In the third phase (2016 – 2025), technology has reached the level of 'high performance' which was indicated from the product with the quality of high 'Cetane' rate and low casting point. The result expected in this phase is 5% of national consumption or equivalent to 4,7 million kilo liter.

This means that agricultural outcomes have value added if it is processed to become Vegetable fuel (Bahan Bakar Nabati – BBN). To support the development of BBN, government has issued President's Regulation (Perpres) No. 5/2006 about Policy on National Energy (PNE) to realize the security of domestic energy supply. In the Perpres, it is targeted to contribute 5% of national Energy Mix composition in 2025.

Then the government issued another regulation that was President's Instruction (Inpres) No. 1/2006, about the acceleration of providing and utilization of BBN. This Inpres was follow-up by the establishing of National Team of Vegetable Fuel Development through Keppres No. 10/2006, where one of their duties is to prepare the Blue Print and Road Map of BBN development. It was prepared to become a standard for the stakeholders in realizing the purpose of BBN development, which is in short term, to reduce the poverty and unemployment, and in the long term, providing and utilizing Biofuel in the national Energy Mix program.
BBN products which will be developed domestically are bio-diesel, bio-ethanol, and PPO (Pure Plant Oil). PPO is produced from castor-oil plant which is purified through etherification process, so the production cost is relatively cheaper.

Until May 2007, Indonesia has four large industries of bio-diesel producers with total capacity of 620.000 tons per year. Those are PT Eterindo Wahanatama (120.000 ton/year – Multiple Feed), PT Sumi Asih (100.000 tons/year – with raw material of RBD Stearin), PT Indo BBN (50.000 ton/year – Multiple Feed), and Wilmar Bioenergy (350.000 ton/year with raw material CPO). Beside that, there are some small and middle bio-diesel industries with total capacity about 30.000 ton per year, such as PT Ganesha Energy, PT Energi Alternatif Indonesia, some BUMN plantation (PTPN), and so on. Until May 2007, there are some bio-diesel industries which are in construction phase, such as PT Bakrie Rekin Bioenergy (150.000 tons/year) and PT Musim Mas (100.000 ton/year).

Meanwhile, the investment in BBN industry is quite assuring, for an example, until the beginning of July 2007, there was 49 companies that have