"We will back up the development of biofuel. Now we are in the process of preparing the plan for five years," he said.

Biofuels are taking on renewed global importance as countries seek to cut hazardous emissions. Palm oil's emergence in the market comes decades after the introduction of ethanol, made from sugarcane, and other additives.

"In the future we are thinking about having some kind of rule, for example, 10 or 20 percent mix between biofuel and other oil to be used, for example, for cars," Apriyantono said.

With soaring crude oil prices, Indonesia imports between 12 to 14 million barrels of oil products a month. It expects to produce 13.6 million tonnes of palm oil this year, more than 9 million tonnes which are exported.

On October 1 the government raised fuel prices sharply for the second time this year to reduce oil subsidies hurting the budget and rupiah currency. Oil subsidies cost around 89.2 trillion rupiah ($8.9 billion) in 2005.

Indonesia aims to boost crop area under palm plantations to 8 million hectares in the next three years from the current 5 million.

One ambitious idea is to open up the world's biggest palm oil plantation, covering an area of 1.8 million hectares in Kalimantan along the border with Malaysia on Borneo island.

The government is also trying to lure foreign capital into Indonesia, where in the first nine months of the year foreign direct investment approvals rose 28 percent to $10.70 billion.

"Actually, I must say that it is still a dream. We are trying to attract investors, especially from China," he said.

"There is some advancement, but not in reality yet."

One challenge is the altitude of the land. Industry officials say most fruitful plantations sit at altitudes below 400 metres, while most of the land in question is higher than 1,000 metres.

"But, you also must understand that this border area is not always flat. Some area is mountainous so we cannot do palm oil plantation in this type of area," he said.

Apriyantono added that the government would also not cultivate crops in protected forests in the area.

That possibility has sparked concerns from environmentalists, but they are also critical of the idea in general.

Borneo island is home to more than 210 mammal species, including ecological wonders like the pygmy elephant and orang-utan, whose long-term survival is already in doubt.

Apriyantono said the presence of plantations could actually help prevent illegal logging in the remote area, as well as improve the economic well-being of people there and make the border more secure.

He said the government was also keen to open jatophra plantations on otherwise non-productive land in Indonesia, but has not yet chosen specific areas on Indonesia's sprawling archipelago.