Southeast Asia is experiencing rapid economic growth. In 2010, the region’s economies expanded at an average rate of 8.4% (World Bank 2011). Another important characteristic of Southeast Asia is that it is densely populated. In 2010, there were 591 million people – 8.7% of the world’s population – living in the region and the population is growing at 1.3% a year (World Bank 2011). The strong economic growth and expanding population mean that there is a need in nearly all Southeast Asian countries to secure long-term energy supplies (Fesharaki et al. 1995, Nidlom and Chantanakome 2008).

In principle, the region...

Most countries in Southeast Asia are facing challenges in securing energy resources. There are two main reasons – population growth and growing economic expansion – both of which lead to a need for more energy. In the mid-2000s, biofuels emerged as the most important way to address energy needs. The countries in the region began to plan strategies to develop the bioenergy sector in order to become energy-secure and less dependent on imports of fossil fuels.

In Indonesia, the need to ‘ensure the security of domestic energy supply and to support sustainable development’ led to the drafting, in 2006, of...

This section discusses the performance of biofuel industries in Indonesia, Malaysia, the Philippines and Thailand. It is important to note, however, that the development of biofuel industries is also taking place in other countries in the region.

The amount of biodiesel produced in Indonesia has increased significantly from a mere 24 million liters in 2006 to approximately 650 million liters in 2011. Because of low domestic absorption, Pertamina, the Indonesian state-owned oil company which is mandated to manage the biofuel programme in the country, has allowed biofuel producers to export (Slette and Wiyono 2011). The number of mills also increased...

Section 3 suggests that bioenergy production in Southeast Asia is not developing as originally expected (Goh and Lee 2010). Even in Thailand, where biodiesel and bioethanol production seem to be growing, use of production capacity is low. In the four countries under consideration, capacity use for biodiesel is below 50%. Only Thailand, at 42% capacity use, and the Philippines, at 36% capacity use, are performing relatively well. In the bioethanol sector, Thailand uses up to 50% of its capacity, while in Indonesia there has been no bioethanol production since 2010. As a result, none of these countries were able to...

This review of biofuel developments in Southeast Asia presents a mixed picture. Initially, government agencies across the region in charge of investment and development in energy established a relatively comprehensive set of biofuel policies. In time, however, structural market conditions, the unpredictability of buyer markets for renewable energy, concerns over competition with food production and misaligned policies have limited development of biofuels.

One of the main drivers behind the high hopes and early excitement associated with biofuels across Southeast Asia was the potential for biofuels to make significant contributions to national energy objectives. Almost all countries in the region saw...