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Increasing domestic use of palm oil biodiesel is a strategic issue for Indonesia. Despite its membership in the Organization of the Petroleum Exporting Countries (OPEC), Indonesia is a net importer of oil. Fuel subsidies impose a significant burden on the national budget and therefore have become a sensitive political issue. After decades of spending a significant portion of the federal budget on fuel subsidies, Indonesia finally abolished most of its fuels subsidies in 2015. On the other hand, since 2006 Indonesia has been increasing its biofuel blend targets as well as providing biofuels subsidies to producers, mainly to reduce the country’s dependence on oil imports, but also to support the domestic agricultural economy and to mitigate climate change.