Fri, 09 Apr 2010

TEMPO Interactive, Jakarta: The State Electricity Company and Pertamina have signed multiple agreements with state plantation companies forestry authority as plantation firms trying to take advantage from the contentious biofuel solution to the environmental problem.

At the signings at the State Enterprises Ministry on Thursday (8/4) Pertamina agreed to buy biofuel produced by a joint venture company consisting of State Plantation Company III, State Plantation Company IV, and State Plantation Company V.

Director of the fourth plantation firm Dahlan Harahap said the joint venture firm is planned in Dumai, Riau Island.

While the three companies committed to buy some oil products from Pertamina like diesel fuel, Industry Fuel Oil, and lubricants.

The other agreements are between the State Electricity Company and State Plantation Companies I XIV, Forestry Authority, and an agriculture company controlled by the government, PT Rajawali Nusantara Indonesia.

Under the agreement, biomass-based electricity generators with capacity of 3 megawatts will be set in 50 palm oil factories. The state power firm, according to Dahlan Iskan, director of the company will buy half of the total 150 megawatts of power generated, while the factories to consume the remaining half.

“Many private companies have built their own generators, so this is considered late, but that's better than never,” Dahlan said.

In early 2007 food prices soared all over the world including in Indonesia as Europe and the US were testing mass production of biofuel in a bid to reduce carbon emission and find new source of energy to replace the depleting hydrocarbon-based fuel. The impacts of the plan on food and risks on human have prompted the EU to revise its biofuel plans.