Jakarta, Oct 17 (Antara) - With the depletion of its fossil fuel
reserves and increasing world calls for a clean environment, Indonesia
is launching a biofuel mix program, as part of its efforts to turn
towards eco-friendly energy.
In carrying out this program, the government has been putting in place a
10-percent biofuel mix of fuel oil called B10. Biofuel mix is to be
increased to 20 percent in 2016 when the biofuel mix is expected to
reach 8 million kiloliters.
To support this program, the government is using crude palm oil (CPO)
as raw material in the 10 percent biofuel mix. This program is also
aimed at reducing fuel imports.
The government is set to increase the biofuel mix target to 30 percent
in the future, if the B10 and B20 programs are successful in 2014 and
2016. "If we have enough time, we can introduce higher biodiesel blends.
With uncertain prices at present, we can best allocate a substantial
amount (of CPO for the mixture program)," Indonesian Trade Minister
Muhammad Lutfi said recently.
This program also offers a sales guarantee to the country's CPO
domestic industry. Thus, domestic palm oil industries have the chance to
expand their businesses.
However, a palm oil watch organization has suggested that CPO-based
biofuel production should be developed to include small farmers in rural
villages.
According to the Working Group of Palm Oil Alliance
for Prosperous Villages (POAPV), the government needs to develop
smallholder-based biofuel alternative energy that benefits small-scale
farmers.
The idea is that this program should be conducted fairly across the
country to produce massive alternative energy for the benefit of
farmers, with CPO being the main raw material.
"It is good for the government to promote smallholder-based biofuel
energy development, which will provide us with sustainable, eco-friendly
fuel," the alliance's working group coordinator, Ahmad Surambo, stated
on Friday.
He pointed out that the government should formulate a system and
technology for its process, which can be managed by the people, so that
small-scale farmers can enjoy the benefits.
"I think the
government should create an appropriate technology and system that could
be owned by many people and be managed directly by the farmers," he
remarked.
Currently, the palm oil business is controlled by large-scale
plantation owners, who have shown great interest in supplying oil for
alternative energy.
"If the biofuel business is controlled by capital owners, it is just
the same as harming the interests of small farmers," he pointed out.
He further expressed hope that the government could empower the people
in managing alternative energy. If this business can be successfully
carried out by small farmers, then it could create smallholder-based
energy technology businesses in villages, which will be capable of
producing their own energy.
"The alternative energy industry should no longer be developed in
cities but, instead, in villages, so that its growth in the country
would be equitable," Ahmad emphasized.
Based on the government's data, Indonesia's energy consumption needs in
2010 reached the equivalent of 3.3 million barrels of oil per day. It
is expected that in the next 15 years, Indonesia's energy requirements
will increase to 7.7 million barrels of oil equivalent per day. This
will boost the development of the palm oil industry at home.
Moreover, according to the Indonesian Chamber of Commerce and Industry
(Kadin), the palm oil industry is more efficient and competitive, as
compared to other industries, as it offers high productivity at the
lowest price.
"The palm oil industry is more efficient in using land, as compared to
other industries, which needs about eight to 10 times more land area for
producing the same volume of oil," Kadin Chairman for Agribusiness and
Food Affairs Franky O. Widjaja remarked on Thursday.
Palm oil plantations are identical to forests, which absorb CO2 and
reduce carbon emissions, thereby improving the environment. "One
hectare of palm oil plantation can absorb 60 tons of carbon per annum,"
he claimed.
He noted that a palm oil plantation can absorb 36.5 tons of dry matter
per hectare per year, as compared to a rain forest that only absorbs
some 25.7 tons per hectare, and as a result, palm oil plantations are
more efficient in rejuvenating the atmosphere.
"The
10 million hectares of palm oil plantations in the country reduce
damage to forests. This offers traditional farmers an opportunity to
become permanent plantation palm farmers," he stated.
Moreover, he said, the use of CPO as biodiesel fuel can reduce the
state expenditure by US$2.43 billion. "The state expenditure could be
economized by using CPO as biodiesel, since the state will reduce its
imports of diesel oil by 28.6 percent," Franky O. Widjaja stated.
The other benefit derived from the use of CPO as biodiesel fuel is that
the country will receive exit taxes worth some Rp25 trillion per year.
Besides this, the government will also receive Rp10 trillion in land
and building taxes, Rp10 trillion in corporate tax, and Rp4 trillion in
motor vehicle police registration number (STNK) taxes.
"The
other income it could contribute directly or indirectly includes an
average of 200 cubic meters of palm oil logs per hectare that can be
harvested at their recycling age," he added.
Currently, Indonesia has 10 million hectares of palm oil plantations.
Of this total, some eight percent are managed by state companies, 49
percent by private CPO industries, and the remaining percentage belongs
to small farmers.
Franky pointed out that the utilization of CPO as an energy source has
yet to reach its optimal level, as the people, palm oil farmers in
particular, still lack the understanding of processing CPO into a
renewable energy product.
"Oil palm plantations could serve as a regional and international
economic power in the agricultural sector through various innovations
and breakthroughs by the government and the private sector," he added
In
the meantime, Nus Zuzulia Ishak, director general of export development
of the trade ministry, has said the prospect of CPO in the global
market remained bright, although the price of the oil was now declining.
"I
believe the price will improve and become better in the future, so that
we have to prepare market penetration," Nus Nuzulia Ishak was quoted as
saying by Tempo.co on Sept. 4, 2014.
He stated that in 2013, the world's CPO import had reached US$42.7
billion. Of that amount, Indonesia had contributed some US$17.3 billion,
or about 43.68 percent of the global requirement, while Malaysia had
supplied US$14.9 billion, or about 36.4 percent.
He noted that Indonesian producers had set a production target of 33
million tons of CPO in 2015, or an increase of 9 million tons from the
estimated production this year.***2***
(T.A014/INE/H-YH)
(T.SYS/A/BESSR/A/Yosep) 17-10-2014 21:49:3 |
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