Indonesia May Set 2,5% Biofuel Mandatory use for Industry

Indonesia May Set 2,5% Biofuel Mandatory use  for Industry

Government will implement policy to use 2,5% biofuel consumption as mandatory for industry sector.

The biofuel price now on drafting process and later would be a reference for biofuel consumer. the price will be refer to MOPS (Mid Oil Platt of Singapore).

Alhilal Hamdi chief executive of Indonesia’s national team on biofuels development (07/09) said the mandatory use of biofuel is a strategy to accustom all industry sector to use biofuel and reduce the use of fossil fuel.

Hamdi also mention that price which could be implemented for biofuel will based on MOPS.

In order to implement this policy, the national team had mapping some sectors such as transportation and industry.

The implementation of biofuel mandatory will be released in the form of energy and mineral resources minister regulation.

Directorate General Electricity and energy utilization also prepare government regulation draft on new and renewable energy that targeted will be complete in August 2008.

But different with minister regulation draft, on government regulation draft biofuel mandatory use are 5%, higher than minister regulation figure.

Evita Herawati Legowo secretary of national team on biofuels development said Minister regulation just regulate based on present condition, meanwhile government regulation based on long term basis.

Alhilal also gave a comment that the plan to mix biofuel to fossil fuel is quite slow, caused by various issues especially the basic material, which related with price and productivity.

At the moment, CPO price higher compare with crude oil price and the result is CPO based biofuel not competitive.

Besides, eventhough bioethanol economic of scale had equal with subsidied premium price, the development of bioethanol biofuel will face a problems such as low growth of bioethanol petrol station.

Other problem are rivalvry between the use for basic material and food.

Even at last D-8 meeting in Kuala Lumpur, President Yudhoyono said the phenomenon of fertile soil diversion for food into biofuel basic material like the situation already happen in develop countries is not good idea and will aggravate the global food crisis.

Kurtubi Director of Center for Petroleum and Energy Studies said government should give more attention on biofuel development from non food commodites.

Jathropa-based biofuel and others non food basic material should be promoted than CPO-based biofuel.

For CPO, not only expensive but its also will threaten food security.

Kurtubi gave a suggestion for government to sell biofuel with MOPS price as reference and to make it as buying price standard from Biofuel producer.

From Industry representative gave a comment on governemnet plan, Kustardjono Prodjolalito Indonesian Synthetic Fiber Makers Association (APSyFI) said industrialists will use biofuel as long as government could guarantee the supply and its infrastructure.

Kustardjono remind the government that the project is not a guinea pig and make a classification for industry that imposed the mandatory policy.

At this moment, Industry searching for cheap and environmental friendly alternative energy along with increase price of oil fuel and coal.
And the diversion of energy consumprion surely need a big investment.

From 13 member of Apsyfi, four had diversion to coal-based electric plant and the rest had use Diesel genset and PLN (State Electricity company).

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