AGP Executive Report

Biodiesel Push: Indonesia launched the mandatory B50 biodiesel rollout (50% palm-based biofuel) starting July 1, aiming to cut diesel imports and save up to Rp170 trillion in forex by end-2026 while lifting CPO value and jobs. Fuel Support for Fishing: Prabowo approved a special Rp15,000/l diesel price for commercial fishers (30–200 GT), with the Rp3,600/l gap funded via BPDP, not the state budget. Palm Oil Supply Watch: Industry says B50 needs more CPO output; this year looks manageable, but sustaining the policy depends on harvest conditions amid El Nino risk. Waste-to-Energy Buildout: Danantara picked eight consortia for a second batch of waste-to-energy projects across 20 cities/regencies, targeting foreign tech and capital. Healthcare Downstreaming: Takeda will invest up to $30m to build a plasma-derived medicinal product network and plasma bank operations in Indonesia by 2027. Trade & Digital Links: Indonesia and Vietnam set a target of US$18b trade by 2028, while Indonesia-China enabled interoperable cross-border QR payments to boost commerce. Shipping Security: A Singapore Strait crackdown helped cut Asian sea robberies to a seven-year low in the first half of 2026. Energy Transition Tech: A GSMA report says mobile operators cut emissions 13% since 2019, but renewable access is still critical for net-zero progress.

Biodiesel Push & Energy Security: President Prabowo Subianto says Indonesia’s B50 biodiesel rollout could cut CO2 emissions by about 44 million tonnes a year and reduce reliance on imported diesel, alongside plans for five new dams (US$542m) and 100 GW solar development. Waste-to-Energy Buildout: Sovereign wealth fund Danantara selected conditional winners for eight waste-to-energy project clusters across 20 cities/regencies, with partners including SUEZ/Veolia, Everbright and Indonesian-led groups, following Bali’s first plant groundbreaking. Downstream Industrial Leap: Danantara also targets 26 downstream projects worth 225 trillion rupiah (US$12.4b) across mining, energy and food, aiming to create 37,833 jobs via smelters and biofuel/food processing. Food & Pharma Supply Resilience: BPOM moves to safeguard pharmaceutical raw materials as Hormuz-linked disruptions loom, noting 90% of inputs are imported, while it prepares front-of-package labeling using nutrient profile models that flag most packaged foods as needing restriction. Trade & Logistics: Bulog continues rice export talks with Malaysia and Singapore, while Descartes reports mild U.S.-bound import gains and warns geopolitics and tariffs will keep supply chains volatile. Digital & AI Delivery: Databricks appoints Indonesian consultancy Insignia as a delivery partner to scale enterprise data and AI deployments. EU Market Pressure on Palm Oil: The EU deforestation law will expand to palm oil derivatives from Dec 2027, with leather exempted. Infrastructure Risk Watch: Jakarta faces rising sea-level and land-subsidence threats, with a proposed “Giant Sea Wall” along Java’s north coast.

Healthcare Downstreaming: Indonesia and Takeda launched a plasma-derived medicinal product ecosystem with an initial US$30m, including a fractionation licence for Takeda and a plasma donation pilot to expand access to lifesaving therapies. Food Security & Rural Supply Chains: The free nutritious meals program has engaged about 148,000 local suppliers and will increasingly route purchases through Red and White Village Cooperatives to strengthen rural economies and food self-sufficiency. Packaging & Seafood Industry: Tetra Pak, with Jealsa, unveiled carton packaging for shelf-stable tuna using Tetra Recart®, aiming to help Indonesia and the Philippines modernize tuna processing and improve sustainability. Industrial Policy & Jobs: Sovereign wealth fund Danantara is developing 26 downstream projects worth Rp225tn (US$12.4bn) across mining, energy and agriculture, targeting nearly 38,000 jobs. Energy Market Pressure: Industry warns Indonesia’s LNG price cut may not solve supply shortfalls, as factories still need guaranteed volumes, not just lower tariffs. Circular Economy Rules: Indonesia will require plastic-packaged goods makers to fund waste collection and management via packaging recovery organizations, with oversight but no direct government handling of funds. Halal Trade Push: D-8 Halal Expo Indonesia closed with over US$13.4m in transaction commitments, supporting Indonesia’s push to be a global halal hub. Agriculture Resilience: Indef urges Indonesia to broaden food reserves beyond rice ahead of El Nino, including minimum stocks for corn, soybeans, eggs, chicken and beef. Co-ops in Strategic Sectors: Government allows cooperatives to manage community wells, mining and CPO, including plans for a cooperative-run CPO factory. Waste Management Targets: Indonesia targets waste overhaul in 40 major cities by 2028, with 24 cities prioritized for completion next year.

Energy & FX: DBS and MUFG flag that a rebound in global energy prices could pressure the peso, but BSP’s hawkish stance may curb volatility as core inflation stays sticky. Aquaculture Ethics: Animal Welfare Observatory reports Indonesian shrimp farms mutilate females via eyestalk ablation to meet demand in Spain, renewing pressure on European import rules. Shipping Markets: Dry bulk Capesize rates extended recovery on firmer cargo volumes and miner activity, with Pacific support and tighter vessel availability. Digital Child Safety: Indonesia says PP TUNAS enforcement is driving platforms to add child protection features like kids’ accounts and age-based access, with ongoing evaluations planned. Village Finance Push: Prabowo’s “Red and White” village cooperatives will offer micro and super-micro loans at 8% and act as integrated rural hubs for logistics, cold storage, pharmacies, and subsidized goods distribution. Textiles Sustainability: APR runs lyocell processing masterclasses in Bandung and Solo to help mills close downstream capability gaps for next-gen sustainable fibres. Aviation Decarbonization: Indonesia plans a 1% SAF bioavtur blend for international flights from Soekarno-Hatta and Bali starting in 2027, tied to Pertamina supply readiness. Halal Economy: Indonesia’s D-8 Halal Expo 2026 targets stronger halal trade and investment despite a still-fragmented global ecosystem. Agriculture in Papua: Indonesia proposes an expanded agri budget for Papua to speed priority commodities and boost farmer welfare ahead of food self-sufficiency goals.

Defence & Industrial Exports: India’s PM Modi’s Jakarta push is tied to major missile deals, with Indonesia signing for BrahMos and Astra systems—raising the stakes for Indo-Pacific security cooperation and defence manufacturing links. Maritime Trade Security: The IMO adopted a Singapore-led resolution backed by Indonesia and Malaysia to keep key shipping lanes open, safe and accessible, after attacks near the Strait of Hormuz. Oilfield Supply Chain: SLB OneSubsea won a 94.6 km steel tube umbilical contract for Eni’s Kutei North Hub offshore field in East Kalimantan, underlining Indonesia’s deepwater engineering demand. Steel & Nickel Value Chain: SAIL and PT Krakatau Steel are exploring a stainless steel slabs JV in Indonesia (0.5–1 mt capacity) to feed SAIL’s India plants, leveraging Indonesia’s nickel resources. Circular Economy Policy: Indonesia’s Environment Ministry is drafting producer-funded Extended Producer Responsibility rules for plastic packaging via a Packaging Recovery Organization, aiming to create green jobs. Aluminium Market Watch: Aluminium prices dipped on global supply signals, while Indonesia-linked production recovery remains a key factor for regional metal flows. Industry Talent Pipeline: Prabowo’s National Internship Program scaled to 150,000 placements across SOEs and private firms, funded at Rp4.2 tn for 2026. Manufacturing Trade Push: Indonesia used INNOPROM 2026 in Russia to court Eurasian buyers and investors across metals, machinery, agro-food and creative manufacturing. Capital Markets: IDX listed seven IPOs by July 10, raising Rp2.16 tn, with four more companies in the pipeline. Aviation & Connectivity: Singapore Airlines’ 737 MAX schedules show longer-than-usual nonstop routes, reflecting demand for long-range narrowbody services.

Wildlife Trade Watch: A US Interior official linked to commercial wildlife breeding is reportedly set to lead the US delegation to the CITES Animals Committee in Geneva, as ethics questions swirl around potential rule changes. Indonesia Industry Push: Indonesia secured 13 industrial MoUs at Russia’s INNOPROM 2026, targeting downstreaming, investment and Eurasia market access. Regulatory for Pharma Innovation: BPOM says adaptive biotech and pharma rules are key to faster advanced-therapy innovation while protecting patients, citing new guidelines and digital side-effect monitoring. Energy & Mining Oversight: The government tightens domestic coal quota oversight under the DMO to keep PLN and industry supplied, while Aceh’s request for onshore Andaman gas processing is still being weighed on economics vs regional development. Halal Expansion: Indonesia promotes halal economic cooperation via the D-8 Halal Expo 2026 and discusses halal certification mutual recognition implementation with Morocco. AI in Creative Economy: Selangor–Indonesia collaboration highlights AI being used for heritage, education and religious services. Trade Diplomacy: Modi’s Indonesia-Australia-New Zealand tour culminates with India–NZ elevating ties to a strategic partnership and a ₹35,000 crore trade target by 2030.

Biodiesel & Palm Oil Downstreaming: Indonesia’s B50 biodiesel rollout is set to boost energy security, raise palm product value, and improve farmer welfare, with the Agriculture Minister citing rising CPO output and exports. Nickel Market Control: The ESDM Ministry says it will not grant broad nickel quota increases, except limited adjustments for smelters short of raw material, aiming to protect global prices. Maritime Security: Indonesia is upgrading North Natuna Sea surveillance with 10 new patrol vessels and expanded Batam dock infrastructure to curb IUU fishing. Anti-Graft Shake-up: Indonesia’s top special-crimes prosecutor resigned after police raids seized 74kg of gold and over $20m in cash tied to corruption probes linked to coal procurement and state insurer scandals. Child-Safe Streaming: The communications deputy minister urged online movie platforms to comply with child-protection rules, including age limits and safer access. Infrastructure for Food/Water: President Prabowo inaugurated five dams across Aceh, Central Java, Bali and NTB, with Meninting Dam highlighted for regional water and irrigation benefits. Creative Economy Partnerships: Indonesia’s creative economy ministry is teaming up with Lippo Malls to develop talent, expand market access, and strengthen local IPs. Indo-Pacific Diplomacy: Indonesia’s strategic ties with India are also in focus as New Delhi and Jakarta deepen defence and maritime cooperation.

Biodiesel Push: Indonesia launched its mandatory B50 palm-oil biodiesel rollout in Karawang, aiming to cut fossil fuel imports and boost energy independence. Water & Food Security: President Prabowo inaugurated the Meninting Dam in Lombok and said five new dams could add 1 million tons of rice, while also linking the push to B50 savings. Power Reliability: The government approved extra coal production quotas for state utility PLN to prevent electricity shortages, with PLN expecting additional coal supplies through year-end. Digital Infrastructure: Investors are eyeing 1.3 GW of new data center capacity in Indonesia, with a pipeline of US$15–20 billion and Big Tech expansion plans. Maritime Industry: Indonesia is partnering with Russia to modernize shipping via technology transfer and joint shipbuilding, targeting a bigger role in Southeast Asia’s logistics market. Policy on Exports: New rules on exports of strategic natural resources move more trade through a designated SOE, with implications for palm oil, coal and ferroalloys producers and financiers. Defense Industry: Prabowo said he blocked attempts to sell Indonesia’s strategic state defense firms to foreigners, pledging to revive and grow them. Energy Transition Finance: BRICS transport talks in Nagpur highlighted follow-up work on connectivity, sustainable mobility and logistics under India’s chairmanship.

Energy & Agriculture Infrastructure: President Prabowo inaugurated five dams—Meninting, Rukoh, Keureuto, Jlantah and Sidan—aimed at boosting irrigation, water security, flood control and renewable energy, with a push for professional operations to protect farmers’ access to water. Biodiesel Push: Indonesia officially launched the mandatory B50 biodiesel program, positioning it as a step toward energy independence and cutting fuel imports; officials cite major foreign-exchange savings and emissions reductions. Power Expansion Plan: Prabowo also floated a rapid solar buildout target of 100 GW over two years, with PLN starting 17 GW this year, as part of the clean-energy transition. Green Tech Investment: China’s Azure plans a USD 2.9 billion lithium battery plant in Indonesia (5 GWh annual capacity), signaling deeper battery supply-chain localization for overseas customers. Tourism Demand: Indonesia’s Tourism Ministry is ramping up global and domestic promotions, reporting potential trips and transaction/FX earnings from recent missions and events. Markets & IPO: RANS Entertainment’s IPO debuted strongly on the IDX, jumping 34.12% on the first day as investors bet on its broader entertainment and consumer ecosystem. Climate Risk: NOAA warns El Niño is intensifying toward “very strong” levels, raising the odds of major weather swings that can hit farming and supply chains. India-Indonesia Diplomacy: PM Modi arrived in New Zealand after concluding Australia talks, with the wider tour reinforcing Indo-Pacific cooperation themes that also tie back to Indonesia’s strategic priorities.

Biodiesel Rollout: Indonesia has officially launched the mandatory B50 biodiesel program, raising palm oil content to 50% in all domestically sold diesel to cut fuel imports and strengthen energy security, with President Prabowo stressing farmers should be the biggest beneficiaries through higher incomes and downstream value. Energy Security & Policy: The move comes as Indonesia also pushes broader energy resilience measures amid global oil volatility, while separate coverage highlights how governments across Asia are building storage and refining capacity to guard against future shipping and supply shocks. Digital Infrastructure: Indonesia’s communications ministry says it will need additional spectrum for future 6G networks, arguing upcoming auctions won’t provide enough bandwidth and pointing to mid-band options as the most promising path. Carbon Removal Dealmaking: Thryve.Earth says it secured first corporate offtakes for 650,000 tons of nature-based carbon removals, with credits tied to rainforest restoration in Sulawesi and buyers including Google, McKinsey and Tencent. Indonesia-India Trade & Defense: India-ASEAN trade hit US$128B for 2025–26, while BJP coverage spotlights India’s proposed BrahMos missile deal with Indonesia and cooperation on critical minerals and Sabang Port as part of deeper Indo-Pacific ties. Maritime & Logistics: Separate reporting flags renewed attention on potential transit fees for the Strait of Hormuz, underscoring how chokepoints can reshape global shipping costs and planning.

Energy & Resources: Australia and India signed an agreement to restart Australian uranium exports to India for peaceful nuclear power, alongside a broader push on renewables, critical minerals and green hydrogen during PM Narendra Modi’s Melbourne visit. Defence & Maritime: The two countries also unveiled new defence and security cooperation pacts, including a joint declaration and roadmaps spanning cyber, critical technologies and supply chains, as they frame the Indo-Pacific as increasingly contested. Indonesia-Industry & Health Capital Markets: Indonesia’s IPO momentum stayed strong with PT Prodia Diagnostic Line (PRDL) debuting on the IDX after a heavily oversubscribed retail offering, highlighting continued investor appetite for healthcare manufacturing. AI Sovereignty: Indonesia’s communications ministry urged a parallel ecosystem for elite digital talent, computing infrastructure and semiconductor supply chains to build AI sovereignty rather than outsourcing value creation. Green Infrastructure in Indonesia: Bali broke ground on its first waste-to-energy plant, targeting major landfill reduction and new green jobs as tourism-linked waste pressures rise. Marketing & Talent: Six Southeast Asian advertising and marketing bodies launched a regional AI-focused alliance, including Indonesia’s digital association, to share skills and cross-border collaboration. Shipping Safety: IMO-backed moves on Hormuz navigation freedom underline how shipping risk keeps reshaping regional logistics planning.

India-Indonesia Strategic Push: PM Narendra Modi wrapped up his Jakarta visit and flew to Melbourne, with Indonesia’s President Prabowo personally seeing him off, after talks that produced a wide roadmap across defence, maritime security, critical minerals, digital cooperation and education. Defence & Critical Minerals: Key outcomes include long-range missile cooperation—Indonesia moving to buy India’s BrahMos and Astra—plus deeper work on critical minerals and the Sabang port project, aiming to strengthen Indo-Pacific connectivity and supply chains. Industrial Collaboration: SAIL and PT Krakatau Steel explored a stainless steel slabs JV in Indonesia, pairing Indonesia’s nickel resources with India’s steelmaking know-how. Payments & Digital Trade: India and Indonesia also moved toward linking UPI with Indonesia’s payment rails (UPI-QRIS), targeting smoother cross-border commerce. B2B Credit Watch: Atradius flagged rising B2B payment stress in Asia, with construction and trade among the most exposed sectors. Energy & Shipping Risk: Strait of Hormuz tensions drove some oil and gas tankers to turn back, underscoring ongoing disruption risk for regional logistics.

India-Indonesia Defence Deal: PM Narendra Modi and President Prabowo Subianto signed an agreement for Indonesia to acquire India’s BrahMos supersonic cruise missiles, plus air-to-air missile cooperation, as part of a broader defence, maritime and industrial push during Modi’s Jakarta visit. Energy Policy: Indonesia’s National Energy Council said the country is not “phasing out” fossil fuels but pursuing fossil decarbonization for energy security, including CCS at coal plants. Digital Payments for Trade: Modi announced plans to link India’s UPI with Indonesia’s payment system to cut cross-border frictions for trade, tourism and business. Aviation Ecosystem: INACA and the Transport Ministry launched Indonesia Aero Summit 2026 to strengthen aviation connectivity and competitiveness, with industry and global OEMs in attendance. AI Governance for MSMEs: Indonesia urged inclusive global AI standards that don’t create compliance barriers for MSMEs, and pushed QR-based cross-border payment interconnection under G20. Rare Earth Crackdown: Prosecutors named three suspects over alleged illegal rare earth exports, accusing them of manipulating lab reports to clear restricted minerals. Market Volatility Watch: A selloff in Indonesian equities drew Allan Gray’s interest as reforms are reviewed, but investors remain wary of fiscal policy and governance. Consumer Safety: EcoWaste Coalition said mercury-laced cosmetics are still being sold online despite bans, flagging enforcement gaps in e-commerce.

India-Indonesia Defence & Maritime: PM Modi and President Prabowo signed 14 agreements, including a major BrahMos supersonic cruise missile supply deal and Astra air-to-air missile cooperation, plus deeper coast-guard and maritime security work. Digital Payments & Industry Links: Talks also advanced UPI–QRIS integration and broader tech cooperation, alongside pacts on critical minerals, steel supply chains, telecoms, space, and health workforce collaboration. Strategic Port Push: The two sides agreed to jointly develop Sabang Port near the Malacca Strait, tying defence and trade routes to Indo-Pacific strategy. Education & Heritage Projects: India will support conservation and restoration of Yogyakarta’s Prambanan Temple, and IIM Bangalore plans an overseas campus in Indonesia. Environment & Resilience: Indonesia promotes mangrove rehabilitation under a 2026–2028 “ecological repentance” drive, targeting degraded coastal ecosystems. Shipping Watch: DP World bought a containership and moved it to the Indian register to expand coastal services under cabotage rules. Climate Risk: An Oxford study flags rising El Niño heat risk for Southeast Asian cities, including Ho Chi Minh City and Bangkok.

India-Indonesia Defence & Critical Minerals: PM Narendra Modi’s Jakarta visit with President Prabowo Subianto delivered a major BrahMos cruise missile deal (about $630m reported) plus Astra air-to-air missile cooperation, alongside supply-chain pacts for steel, nickel and rare-earth magnets and plans to jointly develop the Sabang port near the Malacca Strait. Digital Payments for Trade: India’s UPI will be integrated with Indonesia’s payment system, aiming to make cross-border retail payments easier for tourists and businesses. Education & Tech Collaboration: IIM Bangalore will open its first international campus in Indonesia (Singhasari SEZ), while both sides signed agreements on AI, telecommunications, startups and space research. Maritime Security: Frameworks were also agreed for maritime safety and security cooperation, including coast-guard coordination. Indonesia Economy Watch: Indonesia’s budget deficit outlook is seen widening to 2.85% of GDP, with pressure from energy subsidies and the school meals programme. Environment & Industry Tension: Central Halmahera residents protested nickel expansion tied to the energy transition, warning about local environmental and community costs.

Carbon Markets & Forestry: Indonesia’s Carbon Economic Value (NEK) is projected to pull in up to US$5.8bn in green investment and cut about 570m tonnes CO2e, with the SERUK carbon unit registration system set to launch July 9. Indonesia–Singapore Dealmaking: Leaders’ Retreat in Jakarta produced 26 cooperation agreements spanning trade, energy, digital economy, cybersecurity, supply chains, and cross-border electricity, plus more connectivity and tourism links. Digital Economy Push: Grab says its GrabMerchant AI Assistant has topped 1m merchant interactions in under five months, aiming to help SMEs make faster, data-backed decisions. Indo-Pacific & Trade: PM Narendra Modi arrived in Jakarta for a three-nation tour, with Indonesia and India signaling deeper cooperation as Indonesia prepares to expand use of India’s digital public infrastructure. Maritime Security: Indonesia and Singapore reiterated plans to keep the Strait of Malacca open and accessible, as regional shipping remains a strategic focus. Bali Tourism Enforcement: Bali introduced visa rules targeting foreign influencers and content creators on tourist visas, with penalties including fines, deportation, and lifetime bans. Public Health & Plastics: Indonesia’s BPOM warned microplastics may raise stroke risk, citing research on possible links to vascular damage.