Mon, 20 Nov 2006
From: Antara News
By Andi Abdussalam
Jakarta (ANTARA News) - Indonesia`s preparations to develop biofuel will seemingly get a further boost when President Susilo Bambang Yudhoyono and US President Geoerge W Bush meet in Bogor, West Java, on Monday.

It was reported that among the six topics the two leaders will focus on during their talk at the Bogor palace will be cooperation in the development of biofuel.

Once rich in oil reserves but now facing depletion of the energy source, Indonesia has launched an intensive biofuel production program aimed at cutting its fossil oil consumption by 10 percent in 2010.

Cooperation with the United States is expected to solve the problems Indonesia is facing in carrying out its biofuel development program such as lack of funding and technology.

So far the Indonesian government has mentioned four plant species that can be developed to produce biofuel, namely oil palm and jatropha curcas for biodiesel and sugarcane and cassava for bioethanol or gasoline.

The country is now producing some 14 million tons of palm oil per annum. In terms of production volume, this fact uggests that among the four plant types, only oil palm is ready to be developed to produce biofuel.

Jatropha, cassava and sugarcane still need to be planted on vast tracts of land to reach large enough production volumes. But most of the palm oil being produced is still intended for export. Of the 14 million tons, 11 million are exported and three million are for consumption as cooking oil.

Aware of the need to develop vegetable oils other than palm oil for the development of biofuel, Indonesia`s Agency for the Assessment and Application of Technology (BPPT) in cooperation with the University of Groningen in the Netherlands will hold an international seminar to discuss the economic prospects of jatropha curcas plants.

The two-day seminar will be held beginning on Monday when President Yudhoyono and his US counterpart also discuss the same topic at the Bogor palace.

"The international seminar will discuss government policies on jatropha curcas fuel oil, jatropha curcas plantations, jatropha curcas oil making processes, its economic prospects and jatropha curcas oil conversion into non-energy materials needed by pharmacies and industries," Dr Marzan Aziz Iskandar of the BPPT said.

On the same day, the Indonesian Chamber of Commerce and Industry will also hold a national workshop on alternative energy business.

Marzan said the Indonesian government wants 10 percent of the country`s need for fossil fuels to be replaced by vegetable-based fuels by the year 2010.

But it was feared that the government would not be able to meet the target because it takes several years before jatropha curcas plants can be exploited optimally.

President Susilo Bambang Yudhoyono showed serious attention to development of bio-energy when he convened a limited cabinet meeting in Magelang, Central Java, last July to discuss national energy policies and bio-energy action plans.

"We will continue with the preparations and planning in 2006, and implement (the program) in 2007," the President said.

In order to carry out the program, the Indonesian government has set up a national team in charge of formulating policies for the development of bio-diesel or biofuel program.

Chaired by former manpower minister Al Hilal Hamdi, the national team would formulate policies, including on matters relating to cultivation of land, infrastructure, processing, marketing and funding.

With the program, Indonesia expects to be able eventually to reduce the use of fossil fuel oils by 10 percent in 2010, namely using bio-fuel to replace premium, kerosene, diesel oil and fuel oils used to generate electricity.

Hilal said some 6.5 million hectares would be made available for the development of bio-fuel. Thus it would provide employment for about three million workers and boost rural economies.

Of the 6.5 million hectares, three million hectares would be developed for oil palm, 1.5 million hectares for jatropha curcas, 500,000 hectares for sugarcane and 1.5 million hectares for cassava.

The investment per hectare was estimated at Rp30 million for oil palm, Rp15 million for sugarcane, Rp3 million for jatropha curcas and Rp3.5 million for cassava.

Hilal said the program needed an estimated investment of Rp100 trillion (US$10.8 billion) in the sector within the next five years.

The government also unveiled a crash program to build 11 biofuel plants, with production targets of 187 million liters next year and 1.3 billion liters by 2010, or equivalent to 3 percent of the country`s total fuel consumption of 41 million kiloliters in 2005.

Therefore, up to 2010, the use of fossil oils for the transportation sector was expected to be cut by 10 percent and by 50 percent in the power generation sector.

With the reduction in the use of fossil oils, the amount of foreign exchange that could be saved would reach some 10 billion dollars, Hilal said.

Besides, he added, Indonesia would also export some 10 to 12 kiloliters of bio-fuel. "With this program, arid lands could be cultivated and self-reliant villages developed," he added.

In order to make the program a success, the government called on the banking world to help provide funds for bio-energy development, including the cultivation of jatropha curcas, cassava and sugarcane.

"Banks are requested to invest in the cultivation of jatropha curcas, cassava, sugarcane so as at the same time green arid land and help boost rural economic growth," Minister/State Secretary Yusril Ihza Mahendra said recently.

The government said it was optimistic that banks would eventually become a major source of funding for he program . The government was seeing the possibility of raising Rp100 trillion from general banks to be allocated as loans to oil palm farmers.

"The funds are also to be available for cassava and sugar cane farming if it is commercial while the funds for development of jatropha curcas oil plantations will be made available by the government," Al Hilal Hamdi said. (*)



News Search/Filter
Transaction Rates
20 Oct 17
Buy
Sell
BTC1
76,517,149
76,517,149
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services