EU, Indonesia Eye Deeper Tech Cooperation Ahead of IEU-CEPA

The European Union is seeking to deepen technology cooperation with Indonesia, highlighting opportunities spanning digital infrastructure, artificial intelligence and the country's vast natural resources to bolster competitiveness and expand economic ties. 

Cyprus, which currently holds the Presidency of the Council of the EU, said enhancing the EU's relationship with Indonesia and ASEAN has been among its priorities, including preparations for the entry into force of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA).

"Our hope and aim is that through the implementation of this agreement, the EU-Indonesia economic relationship in all its facets will gain significantly in breadth and depth," Ambassador of the Republic of Cyprus Nikos Panayiotou said in Jakarta on Thursday.

He added that technology and innovation were central to the EU's competitiveness agenda, citing the recently agreed AI Omnibus, which simplifies key aspects of the EU's AI Act, which provides greater legal certainty for businesses, innovators and investors. 

EU Ambassador Denis Chaibi said the bloc sees four strategic reasons for expanding digital cooperation with Indonesia, namely to support the country's digital transformation, promote trusted digital infrastructure and governance, unlock economic opportunities under the IEU-CEPA and strengthen technological resilience through diversified partnerships. 

“The diversity of the infrastructure we're proposing goes with standards but also rules,” he said during the same event.

“We have developed a fantastically sophisticated model of governance and rules for tech, which is open, human-centric and secure.”

Indonesia, meanwhile, said such partnerships would help the country unlock greater value from its abundant natural resources through technology and innovation, with Deputy Higher Education, Science and Technology Minister Stella Christie saying Indonesia possesses at least 28 major natural resources whose economic potential could be significantly expanded through technological development.

“If we're thinking about technological innovation, a very important ingredient of this technology of innovation is definitely the market. And Indonesia is a really great market for technological innovation,” said Stella on Thursday during the same forum.

“Our technology is not yet very well developed, but there is really huge potential.”

Among the country's most promising opportunities, Stella highlighted seaweed, describing it as a future feedstock for the bioeconomy.

“Currently, the global seaweed market is valued at USD 12 billion. However, the prediction that it is going to grow about 10 times, USD 120 billion at least, because of a very important technology and Indonesia is the second world's largest producer of seaweed. However, we have not developed the technology,” she said. 

Unlike conventional biofuel feedstocks, seaweed does not compete with food production, requires neither fertilizers nor fresh water and contains no lignin, making it easier to convert into fuel. 

While the conversion technology already exists, Stella said the bigger challenge is developing farming technologies capable of producing seaweed consistently at scale.

To support that effort, the government is currently building the International Tropical Seaweed Research Center in Lombok, West Nusa Tenggara (NTB), while also seeking partners for GPS and satellite mapping of Indonesia's seaweed-rich waters. 

Stella also highlighted patchouli as another example of value-added innovation, noting that Indonesia's essential oil exports reached USD 260 million in 2024, with improved distillation technology helping local village cooperatives in Aceh produce higher-value patchouli oil and improve farmers' incomes.

Source: The Jakarta Post

Indonesia's 50% Biodiesel Blending Rate Takes Effect

Indonesia's new 50% biodiesel blending mandate took effect on Wednesday, requiring a fuel blend of half palm-based diesel and ​conventional diesel known as B50, even as stakeholders await a ‌revised biodiesel allocation from the government.

In an effort to achieve energy independence, Indonesia increased the mandated blending rate to 50% from 40%, effective July 1. ​The programme, however, faces feasibility challenges in the wake of ​retreating crude oil prices and high prices of palm oil, ⁠which typically trades at a premium to diesel.

"Implementation (of B50) is ​proceeding in accordance with the applicable regulations," energy ministry official Noor ​Arifin Muhammad said in a text message.

While the government has provided a three-month transition period to allow fuel retailers to clear out B40 stocks according to ​a decree issued in June, producers must now deliver higher-quality palm-based diesel ​for retailers to blend into biodiesel.

The new standards include lower water content and ‌longer ⁠oxidation stability than in B40.

While the higher blending rate is likely to increase demand, the government has not announced the amount of palm-based diesel that producers must supply to fuel retailers to mix ​with conventional diesel ​to make B50.

Under ⁠the B40 mandate, initially planned throughout 2026, the ministry had allocated 15.64 million kilolitres of biodiesel.

"The (new) ​allocation is not available yet. Yesterday we had a ​meeting ⁠with the energy ministry and they said it is still being prepared," said Catra De Thouars, vice chair of the Indonesian Biofuel Producers ⁠Association. "For now, ​we are using the old allocation ​as it can still be used."

Between January and April, 4.61 million kilolitres of biodiesel ​were distributed, energy ministry data shows.

Source: Reuters

Indonesia's Sovereign Wealth Fund Attracts USD 2.6 Billion in Foreign Investment in Five Years

Indonesia's sovereign wealth fund, Indonesia Investment Authority (INA), said it has mobilized about IDR 74.5 trillion (USD 4.7 billion) in investments with global partners over its first five years, underscoring continued investor interest in Southeast Asia's largest economy despite a volatile global environment.

INA said its own investment deployment reached IDR 33.3 trillion (USD 2.1 billion), while it helped attract IDR 41.2 trillion (USD 2.6 billion) in foreign direct investment into Indonesia.

The fund's assets under management nearly doubled to IDR 146.2 trillion (USD 9.1 billion) from its initial level, reflecting expansion across infrastructure, digital infrastructure, healthcare, renewable energy, and advanced manufacturing.

"INA's five-year journey reflects how global investors' confidence in Indonesia has translated into long-term investments across strategic sectors," Chief Executive Officer Oki Ramadhana said in a statement on Thursday.

The fund said it has secured about USD 25 billion in investment commitments from 40 strategic partners across 15 countries, including sovereign wealth funds, pension funds, insurers, asset managers, and private equity firms.

Transportation and logistics account for INA's largest investment allocation at 44%, supporting more than 250 kilometers of toll roads, port infrastructure, and modern logistics facilities. Digital infrastructure represents 29.5% of its portfolio, including investments in telecommunications towers, fiber-optic networks, and hyperscale data centers supporting Indonesia's artificial intelligence ambitions.

INA has also invested in geothermal power generation, healthcare infrastructure, and battery materials. Its advanced materials portfolio includes a lithium iron phosphate (LFP) cathode manufacturing platform that reached an annual production capacity of 30,000 tons this year, with further expansions planned through 2027.

Among INA's flagship investments are toll road platforms with global investors including Abu Dhabi Investment Authority and Dutch pension fund APG, the Bakauheni-Terbanggi Besar toll road in Sumatra, the Belawan New Container Terminal developed with Dubai-based DP World, and a USD 150 million investment in a national data center project in Batam.

The sovereign wealth fund said it continues to shift its portfolio toward higher-return assets such as private equity, real estate, and hybrid capital while expanding indirect investment structures to access global investment opportunities.

Created in 2021 to attract long-term foreign capital, INA operates separately from sovereign wealth fund Danantara, which oversees the country's state-owned enterprise assets.

INA retained its investment-grade ratings from Fitch Ratings in 2025 and achieved a Governance, Sustainability and Resilience (GSR) score of 72%, above the global sovereign wealth fund average of 53%, according to Global SWF.

Source: Jakarta Globe