This study spatially estimates degraded lands in Indonesia that have limited functions for food production, carbon storage, and conservation of biodiversity and native vegetation, and examines their suitability to grow biodiesel species (Calophyllum inophyllum, Pongamia pinnata and Reutealis trisperma) and biomass species (Calliandra calothyrsus and Gliricidia sepium). Results showed that Indonesia has ∼3.5 million ha of degraded lands potentially suitable for these species. With the all-five-species scenario, these lands had the potential to produce 1105 PJ yr⁻¹ of biomass and 3 PJ yr⁻¹ of biodiesel. With the biodiesel-only-species scenario, these lands showed the potential to produce 10 PJ yr⁻¹ of biodiesel. Despite this energy potential, however, the land sizes were too small to support economies of scale for biofuel production. The study findings contribute to identifying lands with limited functions, modeling biofuel-species growth on regional lands and estimating carbon stocks of restored degraded lands in Indonesia.