Indonesia's energy independence at risk without freight electrification, warns WRI

Indonesia's pursuit of energy independence faces a significant hurdle: unchecked diesel consumption. WRI Indonesia warns that focusing solely on increasing oil production will not suffice if demand continues to climb, potentially forcing the nation back into diesel imports as early as 2027.

The think tank highlights a stark reality: national diesel consumption has surged by 24.5 percent in the last five years, while domestic refineries can only meet about half of the demand. Projections indicate that without technological shifts in transportation, diesel needs could reach 87.5 million kiloliters by 2040, far exceeding the estimated domestic production capacity of 26.5 million kiloliters.

"Our modeling shows that without significant changes in transportation technology, Indonesia's diesel demand could reach around 87.5 million kiloliters by 2040. Meanwhile, domestic production capacity is estimated at only about 26.5 million kiloliters. This means increasing energy supply alone will not be enough," said Nirarta Samadhi, Country Director of WRI Indonesia. "We also need to start managing energy demand, and the transformation of freight transport is one of the most important strategies to achieve Indonesia's energy independence."

To drive this transformation in the logistics sector, WRI Indonesia launched the Indonesia Freight Decarbonization Accelerator (IFDA) in 2025. This program has engaged 42 companies in the logistics ecosystem through studies, forums, and support for implementing zero-emission heavy vehicles. Additionally, WRI Indonesia developed the Truck Route Assessment & Charging Evaluation (TRACE) platform to assist government and industry stakeholders in evaluating route readiness, charging needs, and infrastructure priorities for electric freight vehicles before investment.

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Our modeling shows that without significant changes in transportation technology, Indonesia's diesel demand could reach around 87.5 million kiloliters by 2040. Meanwhile, domestic production capacity is estimated at only about 26.5 million kiloliters. This means increasing energy supply alone will not be enough. We also need to start managing energy demand, and the transformation of freight transport is one of the most important strategies to achieve Indonesia's energy independence.