Primary energy demand in Indonesia has rapidly been increased, i.e. 43% between 2005 and 2016, while domestic energy supply failed to fulfill this needs and leading to the reliance on energy imports. Meanwhile, vast area of degraded lands in Indonesia have also created an opportunity for the biofuel production, fulfilling energy demand, as well as restoring land with environmental and socio-economic benefits. This paper provides an overview of identified potential and challenges associated with biofuel production from degraded land in Indonesia. Our preliminary findings highlighted that some biofuel species in Indonesia is suitable to grow in a degraded land and potentially restore the land that may not be suitable for common agricultural production and/or reforestation. The initial finding also shows that culturally familiar species and stable markets are favorable terms of biofuel species selection for the landowners. Supportive agricultural extension service such as knowledge and technology for honey production can providing an added value in this concept, in addition to social (e.g. strengthening social solidarity, employment opportunities) and environmental (e.g. carbon storage, soil moisture, erosion control, biodiversity) benefits. Meanwhile, to create this overall initiative to be successful, a supportive measure from the policy makers is needed. Further research on capacity of biofuel species to restore degraded lands in different biophysical profiles, analysis on biofuel production feedstocks and potential co-benefits, viable business model, and stable market are necessary to maximize benefit from biofuel production and to restore degraded lands in Indonesia.