Indonesia to shift 10 pct crude to biofuel

Indonesia plans to replace around 10 percentage of its fossil fuel transportation intake with biofuel products by 2010, an elderly regime official said on Monday. The resource-rich equatorial country has been pushing the consumption of biofuels made from respective resources such as palm oil, bread cane and cassava to reduce the consumption of expensive crude products. The change aims at easing load of sizable subsidy on crude products without raising the cost of subsidised fuel sold on internal marketplace. "We can't growth prices of subsidised fuel as it will damage consumers. But we may be capable to reduce intake and supplant it with biofuel," Evita Legowo, secretary at the National Biofuel Development Team said at the Reuters Global Agriculture and Biofuel Summit.

By 2010, biofuel products are expected to account for 3,8 million kilolitres of overall crude intake for transport at estimated 34. 75 million kilolitres. Indonesia is Asia Pacific's simply OPEC member but it is one of the smallest producers in terms of output and relies on fuel imports as it has failed to exploit original oilfields tight enough. The nation has to consume billions of dollars on oil subsidies and importing oil products. For that, the regime plans to increase bioethanol mix in petrol to 5 percentage by 2010 from 3 percentage, using cassava and cane molasses--thick syrup produced from bread cane during the bread descent process--as feedstock, she said. Production capability for bioethanol using both cassava and cane molasses is expected to hit 3,77 million kilolitres per year, from 135,000 kilolitres per year by the conclusion of December 2007, information from the biofuel squad showed.

Biodiesel mix will remain at 2,5 percent. maybe less because we are yet waiting for jatropha that we planted last year," Legowo said. Indonesian state-owned oil firm Pertamina which retails biodiesel at house, has reduce the biodiesel mix in diesel fuel to 2,5 percentage as rising palm oil prices and deficiency of incentives reduce margins. Malaysian vulgar palm oil futures strike a document on Monday with the benchmark March contract ending at 3,414 ringgit a tonne after hitting 3,420 ringgit, surpassing a higher of 3,280 ringgit reached on Friday. Palm oil prices, upward almost 12 percentage since the beginning of the year, were too supported by prospects of Malaysia introducing palm oil-blended diesel at house this year and Indonesia's plans to double biodiesel output. There are too plans for 12 particular biofuel zones by 2010 where investors could produce an integrated biofuel industry, if approved by the regime, said Legowo.

Indonesia is developing new uncooked materials to guarantee feedstock supplies for biodiesel and biofuel output. It plans to establish 5,25 million hectares of idle soil with palm oil, jatropha, bread cane and cassava by 2010.

By that moment, biofuel products will account for 2 percentage of the nation's overall vitality mixture of 5,29 million kilolitres.

1 Comment:


5:35 PM

It will be interesting to see just how much this policy will raise the price of palm oil in the short term, whether Jatropha will come on stream fast enough and whether more forest is cleared for biofuels. It probably makes the idea of producing biofuels in Europe much more dependent on subsidies...