The use of biofuel to power transport vehicles has attracted considerable interest and expectation during the last decade. Biofuel is expected to contribute solutions to a range of problems, including the reduction of greenhouse gas emissions, the provision of a renewable and therefore sustainable energy source, and an increase in income from agriculture. However, concerns regarding the consequences of its production have also emerged, and claims have been made that its benefits are exaggerated. This article focuses on Indonesia, where vast quantities of land have been converted into plantations in anticipation of the biofuel boom. The article discusses the expected benefits to Indonesia, and the framework the government has put in place to encourage and promote biofuel production. However, in spite of its promises, to date any such benefits have been far outweighed by the harmful consequences of current methods of plantation and production. The article examines these consequences, with a particular focus on the effect on indigenous communities. It concludes that the current method of biofuel plantation in Indonesia is unsustainable, and observes that it may in fact be placing indigenous communities “on the verge of completely losing their traditional territories and thus of disappearing as distinct peoples”.