Short Communication: Has Indonesia been unable to compete in the world biodiesel trade during the implementation of the biodiesel blending mandate?

Short Communication: Has Indonesia been unable to compete in the world biodiesel trade during the implementation of the biodiesel blending mandate?

Yoyon Muzayyin Masyhuri Dwidjono Hadi Darwanto

Faculty of Agriculture, Gadjah Mada University, Indonesia

Department of Socio-Economic Faculty of Agriculture Gadjah Mada University, Indonesia

| |
| | Citation



To meet the domestic demand for biodiesel, because the application of the biodiesel blending mandate is very aggressive and even exceeds that of all countries in the world, it is suspected that Indonesia, which is involved in export trade, has lost its export competitiveness when compared to other leading biodiesel exporting countries in the world. The purpose of this study is to determine whether biodiesel can survive or lose its competitiveness with the application of the biodiesel blend- ing mandate in that country which is the highest when compared to all other biodiesel producing and exporting countries. By using the analysis method of export market share and comparative advantage, research was conducted to determine whether Indonesian biodiesel has export competitiveness or not when compared to other leading biodiesel exporting countries. The results show that the average market share of Indonesia’s biodiesel exports is still higher when compared to that of the majority of biodiesel exporting countries and including biodiesel exporting countries that have a comparative advantage even when the biodiesel blending mandate is enforced every year com- pared to the majority of the world’s leading biodiesel exporting countries that have a comparative disadvantage.


comparative advantage, competitiveness, energy policy, market share, Palm biodiesel


[1] Thomas, S., The Hinkley Point decision: An analysis of the policy process. Energy Policy, 96, pp. 421–431, 2016.

[2] Lopes, M. A. R., Antunes, C. H., Janda, K. B., Peixoto, P. & Martins, N., The potential of energy behaviours in a smart(er) grid: Policy implications from a Portuguese exploratory study. Energy Policy, 90, pp. 233–245, 2016.

[3] Michelsen, C. C. & Madlener, R., Switching from fossil fuel to renewables in residential heating systems: An empirical study of homeowners’ decisions in Germany. Energy Policy, 89, pp. 95–105, 2016.

[4] Zhang, L., Zhou, P., Newton, S., Fang, J., Zhou, D. & Zhang, L., Evaluating clean energy alternatives for Jiangsu, China: An improved multi-criteria decision-making method. Energy, 90, pp. 953–964, 2015.

[5] Witcover, J., Yeh, S. & Sperling, D., Policy options to address global land use change from biofuels. Energy Policy, 56, pp. 63–74, 2013.

[6] Madlener, R., Kowalski, K. & Stagl, S., New ways for the integrated appraisal of national energy scenarios: The case of renewable energy use in Austria. Energy Policy, 35(12), pp. 6060–6074, 2007.

[7] Yang, Y., Wang, C., Liu, W. & Zhou, P., Microsimulation of low carbon urban transport policies in Beijing. Energy Policy, 107, pp. 61–572, 2017.

[8] Yeh, S., Witcover, J., Lade, G. E. & Sperling, D., A review of low carbon fuel policies: Principles, program status and future directions. Energy Policy, 97, pp. 220–234, 2016.

[9] Mahmoody, A., Sharafmal, F., Razafindrakoto, H., Dhakal, N.R., Ayuthia, I., Yuliani, F., Widagdo, N., A brief summary of good practices and challenges on renewable energy development in Afghanistan, Indonesia, Madagascar and Nepal, Indonesian Ministry of Energy and Mineral Resources and Indonesian Ministry of State Secretary, Jakarta, 2021.

[10] Kharina, A., Malins, C. & Searle, S., White paper biofuels policy in Indonesia: Over-view and status report. The ICCT, 2016.

[11] Ketels, C., Export Competitiveness: Reversing the Logic. Accessed on: 20 Dec. 2021.

[12] World Bank., Measuring Export Competitiveness, Accessed on: 20 Jan. 2019.

[13] Sung, B. & Song, W.-Y., Causality between public policies and exports of renewable energy technologies. Energy Policy, 55, pp. 95–104, 2013.

[14] Raza, S.A., Shahbaz, M. & Nguyen, D.K., Energy conservation policies, growth and trade performance: Evidence of feedback hypothesis in Pakistan. Energy Policy, 80, pp. 1–10, 2015.

[15] Marasco, A., Picucci, A. & Romano, A., Market share dynamics using Lotka–Volterra models. Technological Forecasting & Social Change, 105, pp. 49–62, 2016.

[16] Betrán, C. & Huberman, M., International competition in the first wave of globaliza-tion: new evidence on the margins of trade. The Economic History Review, 69(1), pp. 258– 287, 2015.

[17] Watson, M., Historicising Ricardo’s comparative advantage theory, challenging the nor-mative foundations of liberal International Political Economy. New Political Economy, 22(3), pp. 257–272, 2016.

[18] Jones, R. W. & Weder, R., 200 Years of Ricardian Trade Theory: Challenges of Global-ization, Springer International Publishing AG., 2017.

[19] UN Comtrade. Accessed on: 20 Feb. 2022.

[20] ITC. Accessed on: 20 Feb. 2022.

[21] Cooper, L. G. & Nakanishi, M., Market-Share Analysis: Evaluating Competitive Mar-keting Effectiveness. Boston Dordrecht London: Kluwer Academic Publishers, 1988.

[22] Yu, R., Cai, J. & Leung, P., The normalized revealed comparative advantage index. The Annals of Regional Science, 43(1), pp. 267–282, 2008.

[23] Hariram, V., Fernandes, J.L., Jaganathan, R., Seralathan, S. & John, G., Optimized biodiesel production and emulsification of Pongamia seed oil using Taguchi method. Inter-national. Journal of Renewable Energy Research, 7(4), 2017.

[24] Kiggundu, I., Kabenge, S., Arhin, G. & Banadda, N., Impacts of biofuel policies on welfare and food security: Assessing the socioeconomic and environmental tradeoffs in Sub-Saharan Africa. International Journal of Renewable Energy Research, 7(4), 2017.

[25] Youssef, H. E., Fetni, S., Boubahri, C., Lassoued, I. & Said, R., An experimental study of optimization of biodiesel synthesis from waste cooking oil and effect of the combustion duration on engine performance. International Journal of Renewable Energy Research, 9(3), 2019.