Biofuel trading scheme awaits regulations

Biofuel trading scheme awaits regulations

The Jakarta Post, Jakarta

The full-scale development of biofuels could start sooner rather
than later with a presidential instruction on trading systems
currently being prepared, a ministry spokesman says.

"Business people are now waiting for the trading regulations.
We have completed the draft and it should be made official in the
next couple of months," State Minister of Research and Technology
Kusmayanto Kadiman said on Tuesday.

The draft of the presidential instruction contained mostly
incentives for businesses that develop biofuels and was currently
the subject of review from all stakeholders, he said.

Kusmayanto explained that one option for the trading of
biofuels could involve mixing it into existing oil-based fuel
products currently sold at gas stations.

He said that the idea of combining 10 percent biofuel with 90
percent fuel was both technologically and economically feasible.

According to recent research by the Agency for the Study and
Application of Technology (BPPT), mixing in such compositions
would result in lower carbon emissions.

"For a start, once the trading scheme is official, we propose
that the end result of the mixture contain 5 percent biofuel.
That should give time for the industry to develop themselves
gradually before meeting the market's demand," he said.

The ministry stated that by 2010 the use of both biodiesel and
bioethanol should have reached some 2 percent of total national
fuel consumption.

Indonesia's oil-based fuel consumption currently stands at 70
million kiloliters.

Kusmayanto said that if 10 million hectares of abandoned land
in the country was planted for biofuel, some 40 percent of
Indonesia's fuel consumption could be met.

There are 60 options for potential plants, ranging from
cassava and sugarcane for bio-ethanol, or jatropha, oil palm,
sunflower and soybean for bio-diesel.

Investment in the sector could start from as low as Rp 300
million, depending on the scale of the plantation and the
factory.

"Currently, we are one the biggest CPO (crude palm oil)
producers. That could be feasible in the short period," he said,
explaining the snowballing effect of refining CPO into bio-diesel
would create employment for more than 100,000 workers.

Indonesia is the second largest CPO producer in the world.
Together with Malaysia, the world's largest producer, it controls
85 percent of global CPO production. Last year, there were a
total of 4.1 million hectares of oil palm plantations in the
country.