SMALL BIOFUEL PRODUCERS NEED SUBSIDY

by Andi Abdussalam

Jakarta, May 14 (Antara) - With Indonesia's fossil fuel resources shrinking, the government is developing biofuel as a new and renewable energy (EBT) alternative.          This is a form of energy that can be put to multiple uses, such as to fuel the power plants that produce electricity.          The Indonesian Young Entrepreneurs Association (Hipmi) has called upon the government to provide subsidy to those who support the production of biofuel, and thus facilitate the process in the downstream sector.          "The government needs to provide subsidy for small and medium scale businesses as well as tax incentives for commercial, transportation and industrial sectors," Gafur Masud, the deputy treasurer of Hipmi, urged in Jakarta on Thursday.          He stated that special incentives need to be given to biofuel producers as that will help bring down the export of biofuel raw materials in large volumes.          Gafur, who is also the chief executive officer of Petro Perkasa Indonesia, argued that the government also needs to provide incentives in other forms, such as making banking access easier for small and medium scale businesses so that they can access easy finance.          "No less important is the support that the government can extend by conducting research and development for the advancement of biofuel business," Gafur said.

PERTAMINA PREDICTS SURPLUS IN DIESEL PRODUCTION

By Andi Abdussalam

Jakarta, Nov 28 (Antara) - Under obligation to implement the government's mandatory biofuel mix of 20 percent diesel fuel, state-owned oil/gas firm Pertamina has predicted that it will have pure diesel production surplus of about 400 thousand tons per month.          The government, through the Energy and Mineral Resources Ministry (ESDM), has over the past two years issued a regulation requiring Pertamina to implement a mandatory biofuel mix of diesel oil.          The mandatory biofuel mix policy is expected to have broad implications such as the absorption of 5.3 million kiloliters of biodiesel, which is some 4.8 million tons of the country's crude palm oil (CPO) production, and the retrenchment of US$2.54 billion of foreign exchange from fossil fuel import cuts.          The government through the ESDM minister's regulation number 12/2015 has raised the mandatory biofuel mix of diesel from 10 percent (B10) in 2014 to 15 percent (B15) this year.          It is planning to raise it further to 20 percent (B20) in 2016.          For this purpose, Pertamina established a partnership with 11 biodiesel producers to meet the need for the fuel from November 2015 to April 2016.

INDONESIAN GOVT PRIORITIZES RENEWABLE ENERGY DEVELOPMENT

By Andi Abdussalam

Jakarta, March 27 (Antara) - The Indonesian Government is focusing on the development of renewable energy and other alternative sources in the face of the depletion of its fossil-based fuel energy reserves.          In an effort to develop alternative sources and renewable energy, the government is turning its attention to developing, among other factors, solar energy and energy from processed urban wastes, industrial refuse, vegetables, and plantations.          Minister of Energy and Mineral Resources (ESDM) Sudirman Said has stated that the government will seriously implement its program to produce renewable energy from vegetables.         "The program to generate renewable energy from vegetables is one of our priorities. We hope the mandatory program can generate 1.57 million kiloliters of energy from vegetable wastes," the minister said recently.          According to Said, President Joko Widodo has put forth an idea for managing displaced land in Indonesia. "Displaced land should be made use of for the green diesel development program by opening energy plantations at those locations," he stated.          The minister further noted that extraordinary support will be needed from the government, private sector, and farmers to expedite the green diesel development program.          Besides exploring and implementing energy generation programs, the government has also issued a policy raising its mandatory biofuel mix of diesel from 10 percent (B10) to 15 percent (B15).

INDONESIA RAISES BIOFUEL USE TO REDUCE FOSSIL FUEL IMPORTS

By Andi Abdussalam

Jakarta, March 24 (Antara) - The Indonesian government has raised its biofuel mix of diesel fuel oil from 10 percent (B10) to 15 percent (B15) in an effort to save US$2.54 billion per annum on fossil fuel imports.          The B15 mandatory policy will be implemented by the Ministry of Mineral Resources and Energy (ESDM) from April 1, as part of efforts to support the government's macroeconomic policy.          "This is one of the fundamental changes being implemented in the energy sector. The composition of the energy mix has been gradually shifted from dependence on fossil fuel to new and renewable sources of energy (EBT)," ESDM Minister Sudirman Said stated here on Monday.          The minister said that the policy, which is contained in the ESDM minister's regulation number 12/2015, will have broad implications, such as the absorption of 5.3 million kiloliters of biodiesel, which is some 4.8 million tons of the country's crude palm oil (CPO) production, and the retrenchment of US$2.54 billion of foreign exchange from fossil fuel import cuts.          If successful, the biofuel mix will be increased to 20 percent (B20) in 2016, for instance, when the use of the mix is expected to reach 8 million kiloliters.          The 15 percent increase in the use of biofuel mix is part of the government's newly announced economic policy package.

GOVERNMENT BOOSTING BIOFUEL DEVELOPMENT

By Andi Abdussalam

Jakarta, Feb 5 (Antara) - The government is boosting the development of biofuels in a bid to substitute conventional fuels as the country's fossil fuel reserves are steadily depleting.          The subsidies, which were earlier given to fossil fuels, are now being redirected by the government to develop biodiesel and bioethanol in order to achieve the goals outlined in its biofuel program.      In implementing this program, the government has put in place a 10-percent biofuel mix of diesel fuel oil called B10. If successful, the biofuel mix will be increased gradually to 20 percent (B20) in 2016, for instance, when the biofuel mix is expected to reach 8 million kiloliters.          With the biofuel mix program, the government, in its national energy program, has set itself a target of 30 percent biofuel consumption by 2015.          Thus, some of the subsidies given to fuel oils, so far, will be diverted to financing the development of biofuels where the government has proposed to the House of Representatives (DPR) to increase the subsidies for biodiesel and bioethanol.

CPO EXPECTED TO SUPPORT GOVT BIOFUEL PROGRAM

By Andi Abdussalam
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.

INDONESIA BOOSTS ALTERNATIVE ENERGY DEVELOPMENT

By Andi Abdussalam

Jakarta, Aug 18 (Antara) - With its oil reserves expected to run out in ten years, Indonesia is making efforts to develop alternative energy, particularly biofuels, to replace its fossil fuel energy.          Based on data released by the National Energy Council (DEN) at a workshop in July last year, Indonesia's reserves for oil, gas, and coal will run out in 10 years, 30 years, and 80 years, respectively.          From now on, Indonesia should develop sources of renewable energy to prepare for its future requirements and to reduce and gradually eliminate its energy subsidies, which have continued to burden state budget.          Finance Minister Chatib Basri said in an effort to alleviate the subsidy burden of the state budget, the government will increase its efficiency on subsidy budget, reduce energy subsidy in stages, continue its previous fuel-to-gas conversion program, resume its fuel consumption control, and push ahead the development of its new and renewable energy program.          In his address before a plenary session of the House of Representatives (DPR), President Susilo Bambang Yudhoyono delivered the budget plan for 2015 where fuel subsidies were raised from Rp246.5 trillion in the revised 2014 state budget to Rp291.1 trillion in the Draft 2015 State Budget.

RI PROMOTES USE OF RENEWABLE ENERGY FOR TRANSPORTATION

By Andi Abdussalam

Jakarta, Dec 28 (Antara) - Indonesia has begun to develop and encourage the use of biofuel for transportation, including aviation, in an effort to promote renewable energy and reduce the impact of climate change and greenhouse gasses.          For the development and use of renewable energy in the transportation sector, two ministries have established cooperation to develop and use biodiesel for aircraft and for other types of transportation.          The two ministries involved in the utilization of renewable energy in the transportation sector are the Ministry of Transportation and the Ministry of Energy and Mineral Resources.          "The initiative to utilize biodiesel for aircraft and renewable energy use is part of the government efforts to carry out its commitment to maintain the environment," Transportation Minister Evert Erenst Mangindaan said on Friday.          The government, through Presidential Decree No. 61/2011 and Presidential Decree No. 71/2011, has provided a legal basis for ministries and institutions to participate in development in the energy sector.

USE OF BIOFUEL PROVES TO BE COSTLIER

By Andi Abdussalam

akarta, May 28 (ANTARA) - The mandatory use of biofuels in Indonesia to replace the country's shrinking fossil fuels is not yet running smoothly. Biofuel proves to be more expensive than fossil fuels so that biofeul use even causes inefficiency, officials say.

        The price of biofuel per liter now is Rp9,000 or double the price of premium gasoline which is Rp4,500 per liter.

        "Rp9,000 per kg is too high for the public. If the government uses this as a reference price, it should provide a subsidy," chairman of the Indonesian Biofuel Producers' Association (APROBI), Purnadi said.

        According to state-owned power utility company PLN, the use of biofuels to fire its generators was affecting the power production process and reducing its efficiency.

        "It cuts our efficiency by 0,5 percent," PLN President Director Fahmi Mochtar told a hearing with the House Commission VII for energy affairs. PLN is now under a trial use of biofuel mixture by a number of its power generators.

        It turns out that the use of biofuel creates lower calories. It is unlike pure fuels which could produce higher calories when used by generators.

        Oil observer Kurtubi admitted that the use of biofuel in Indonesia had not developed as expected. Policies of the government and private firms (upstream industries) have not yet gone in the same direction, particularly with regard to biofuel produced from crude palm oil (CPO).

        "The price of CPO is relatively high. At a time when its price is rising, producers preferred to export their products, while when the price is declining they would reduce their production," he said.

        In the face of the shrinking fossil fuels, the government must be consistent in its biofuel programs in order to reduce its dependence on the shrinking energy reserves, Kurtubi said.

        "At present the biofuel potentials have not yet been exploited maximally while the country is rich in raw materials, such as cassava, palm oil, jatropha curcas and molasses for the production biofuels," Kurtubi.

        He said Indonesia was rich in biodiversity and had vast land areas which were suitable for the development of biofuel that could turn Indonesia into an important biofuel producer in the world.

        Kurtubi said it was now time for Indonesia to diversify its energy from farm produce owing to the fact that world crude price was not showing an upward trend.

        "Biofuels have not yet developed well in the country because the government is not yet firm on its farm produce regulation. The policy to boost the development of biofuels is not yet consistent," he said.

        Therefore, according to Purnadi, the political will of the government is needed. "The main problem so far is that the price of biofuels, believed to be environment friendly, is too high. It therefore needs the government's political will to reduce it," Purnadi said. He said all over the country the price of biofuel is higher than that of fossil fuels.

        "Other countries have political will in developing their biofuels. They provide for example tax compensation and so forth," the APROBI chairman said adding that his organization has set itself a target of producing 214,541 kiloliters of bioethanol in 2010. This year the country's bioethanol production capacity reached 93,000 kiloliters.

        Virtually the government at present is submitting to the House of Representatives (DPR) a budget allocation amounting to Rp1.554 trillion in biofuel subsidy in the 2010.

        Director General for oil and gas Affairs Evita Legowo told a hearing with House Commission VII for energy affairs that the subsidy allocation consisted of Rp429 billion for bioethanol and Rp1.125 trillion for biodiesel.

        "The volume of the biofuel (BBN) which would be subsidized in the 2010 state budget consisted of 214,541 kiloliters bioethanol and 562,534 kiloliters biodiesel," the director general said.

        However, the House of Representatives has delayed deliberating the proposed subsidy budget for biofuel until after a presidential decree regulating subsidies for fuel oils had been revised.

        "How can we deliberate a proposed biofuel subsidy if it has no legal basis," Commission VII member Alvin Lie said during a meeting with PLN president director on Wednesday.

        He said that the presidential decree which regulated the procurement and distribution of certain fuel oils should first be revised to include biofuel before the House could discuss the government's proposal for a biofuel subsidy.

        The House Commission VII member was referring to Presidential Decree No.71 / 2005 on the Procurement and Distribution of certain fuel oils. The presidential decree only regulates subsides for premium gasoline, diesel oils and kerosene.

        In order to provide a subsidy for biofuels the presidential decree should be revised and include biofuels first . "There must be a political decision first with regard to the revision of the presidential decree before we could discuss figures on the subsidy," Lie of the National Mandate Party (PAN) said. ***2*** (T.A014/A/HAJM/16:30/a014) (T.A014/A/A014/A/A014) 28-05-2009 16:55:23

FIRMS BEING ENCOURAGED TO INVEST IN BIOFUEL PROJECTS

By Andi Abdussalam


        Jakarta, Feb 17 (ANTARA) - Facing the problem of depleting oil reserves and continuously increasing fuel oil consumption, Indonesia is trying to make use of its vast land territory by encouraging investors to invest in integrated biofuel projects to replace fossil fuels.

        Some domestic and foreign companies, particularly plantation firms, have begun to look at this business. "Indonesia, along with Brazil, has the potential to become a world biofuel producer," Siswono Yudohusodo, chairman of the Indonesian Farmers Association (HKTI) said.

        At least three state-owned plantation companies, or PTPNs, are now conducting a feasibility study on the production of biofuel with an investment of Rp587.5 billion.

        Besides domestic companies, at least five Chinese firms are also reportedly investing US$500 million in biofuel development in East Nusa Tenggara (NTT).

        According to State Enterprises (BUMN) Minister Sofyan Djalil, his office is now encouraging state-owned plantation firms to invest Rp587.5 billion in biofuel and bioethanol production.

        "Besides seeking profits, PTPNs are also expected to be free from dependence on crude palm oil (CPO) by investing in the biofuel and bioethanol sectors," Djalil said.

        The minister said that state plantation companies needed to invest in the biofuel and bioethanol sectors in an effort to diversify their products amid the increasing need for biofuel at home where state-owned electricity firm PLN was expected to use biofuel for about 5 to 10 percent of its power generators.

        State Enterprise Deputy Minister for agro-industry, plantation and printing, Agus Pakpahan, said PTPN III, PTPN IV and PTPN VII were carrying out a feasibility study on the development of biofuel and bioethanol from the oil palm raw materials.

        "Feasibility study is undergoing and it is expected to be completed in several months to come. If completed, we will start the construction," he said.

        The main projects of the three state plantation companies included the construction of a biodiesel factory with a capacity of 400,000 tons per annum. Its construction will cost Rp237.5 billion and US$17.5 million.

        Besides, the projects also included a bioethanol project worth Rp350 billion and a biodiesel factory with a capacity of60,000 - 100,000 metric tons per annum worth US$17.5 million. The length of period needed to construct the three projects was estimated at two years after the feasibility study was completed.

        In the meantime, Indonesian Ambassador to China Sudrajat said recently that at least five Chinese firms were now ready to develop a biofuel business in Indonesia with a combined investment of US$500 million.

        "The Chinese firms have begun developing jatropha curcas plantation to develop biofuel in NTT ," the ambassador said.

        The Chinese firms, which come from Shenzen Shangai provinces, are developing jatropha in East Nusa Tenggara in cooperation with domestic companies and will further expand their business to Indonesian eastern rations.

        Based on a research, alternative energy that could be produced from Jatropha curcas has quality equal to diesel oil. The research was done by the Bandung-based Institute of Technology (ITB) in cooperation with the Mitsubishi Research Institute.

        In 2006, a team has also conducted a test on the use of jatropha curcas oil as fuel for motor vehicles and it found that this alternative energy was able to support a trip of more than 3,000 km from Atambua in East Nusa Tenggara province to Jakarta.

        Jatropha curcas nuts had 30 to 35 percent oil content so that each three kgs of nuts are able to yield one liter of bio-diesel. From the economic aspect, the price of bio-diesel which is produced from jatropha curcas nuts was about Rp4,500 per liter, cheaper than the rice of diesel oil and premium gasoline.

        Basides jatropha curcas, the Chinese firms will also develop biofuel from oil palm. Therefore, they are also planning to develop palm oil plantations in Kalimantan with an investment of about US$50 to US$150 million dollars.

        "I forget the name of the locations in Kalimantan but they have the commitment to invest more capital in order to increase their biofuel production capacity in Indonesia," Ambassador Sudrajat said.

        In Sumatra, particularly in Bengkulu province, a Belgium non-governmental organization, SIPEF, is also planning to invest some US$1 million in the development of jatropha curcas and other plants to produce biofuel in Mukomuko district.

        Mukomuko district government has set aside 6,000 hectares for the development of the plantation. "SIPEF will invest US$1 million in this project and we hope it would help the regional government not only in preserving forest but also in giving benefit to the local people," Ichwan Yunus, Mukomuki district head said.

        Local people in rural areas are actually a potential asset for the development of plantations that could produce biofuel in Indonesia

        According to Siwono Yudhohusodo, Indonesia had a vast land territory, a great number of workers, a good domestic and international market that could support its efforts to develop ethanol production and jatropha curcas plantations.

        "What is needed is a government policy which would enable villagers in rural areas to produce alternative energy," he said.***2*** (T.A014/A/HAJM/14:15/A/O001) (T.A014/A/A014/A/O001) 17-02-2009 14:24:28