<![CDATA[Achieving sustainable expansion of Indonesia’s palm-oil biofuel sector requires overcoming two interconnected challenges: ecological limits on feedstock expansion and weak translation of research into industry adoption. Although innovation ecosystem research emphasizes multi-actor collaboration, existing innovation ecosystem research provides limited understanding of how governance and innovation intermediation can bridge these gaps in the palm oil biofuel sector. Using a constructivist grounded theory approach, the study draws on 12 semi-structured interviews with key policymakers, industry practitioners, and researchers, analyzed using constructivist grounded theory (CGT) and triangulated with policy documents and a structured comparison with Malaysia. The findings reveal two interconnected bottlenecks. First, a persistent research-to-commercialization gap limits the deployment of innovations. Second, sustainability-oriented technologies experience systematically lower adoption than productivity enhancing innovations because of governance, coordination, and incentive barriers. Comparative analysis further indicates that more institutionally integrated governance arrangements are associated with to stronger productivity and sustainability outcomes. To address these challenges, the study proposes an intermediated quadruple-helix innovation ecosystem model centred on a state-backed innovation intermediary that coordinates knowledge and funding flows, aligns research agendas with industry needs, and strengthens smallholder participation as a feedstock-resilience strategy. The findings further demonstrate that sustainability functions not only as an environmental boundary condition but also as an enabling condition for innovation and long-term sectoral resilience. Theoretically, the study advances ecosystem theory by embedding explicit governance intermediation alongside coordinated knowledge and funding flows. Practically, it offers policy directions to accelerate technology commercialization, integrate smallholders, and embed sustainability into biofuel policy design.]]>
