Experts urge utilisation of Sharia financing to develop biodiesel

Indonesia needs to create a biodiesel funded by sukuk that will benefit the halal industry. Jakarta (ANTARA) - Sharia economics and Islamic financial policy expert, Patria Yunita, urges Indonesia to utilise Sharia financing to develop biodiesel in order to curb the impact of rising global energy costs on the domestic halal industry. According to Patria during a discussion in Jakarta on Tuesday, amid the volatility in global oil prices due to geopolitical tensions in the Middle East, the global halal industry will continue to grow and impact Indonesia. Nevertheless, the rise in oil prices is seen to indirectly affect the halal industry, particularly through inflationary pressures and increased production and distribution costs. For this reason, Patria encourages the development of alternative energy based on Sharia financing. “Indonesia needs to create a biodiesel funded by sukuk that will benefit the halal industry … to reduce dependence on oil,” she stated. Based on the Global Islamic Economy Indicator Score 2024/2025, Indonesia ranks third in the world. Sectorally, Indonesia holds the first position for modest fashion, second for pharmaceuticals, fourth for halal food, sixth for Sharia finance, and seventh for media and recreation. Indonesia also ranks sixth globally in Sharia finance. This position is seen to open up significant opportunities for Indonesia to attract investment, including from Gulf Cooperation Council (GCC) countries and non-Muslim investors. She notes that the global Sharia finance industry, as a source of financing, also demonstrates substantial capacity. Patria cites a Global Growth Insights research report which records that the value of the Islamic finance market in 2025–2026 has reached around 3–4 trillion US dollars, with the main concentration in the Gulf region controlling 1.44 trillion US dollars or 42 percent market share. The Asia-Pacific region holds the second position with a value of 1.13 trillion US dollars or 33 percent, followed by Europe at 0.51 trillion US dollars or 15 percent. This market is projected to grow at an average of 13.23 percent per year until 2035. In addition to sukuk, she also highlights the potential utilisation of Islamic social finance instruments such as zakat and wakaf to support the strengthening of the halal industry, in line with the national Sharia economy development plan by the National Committee for Sharia Economy and Finance (KNEKS) together with Bank Indonesia. She adds that the halal industry is a national asset because it directly contributes to gross domestic product (GDP) and has multiplier effects on the economy, including job creation, increased investment, and export opportunities for halal products to non-majority Muslim countries.