The government has targeted to achieve 25 percent new and renewable energy in the national energy mix.
JAKARTA – The palm oil industry has not only contributed foreign exchange for the country. It also has an important role in achieving the target of energy mix in Indonesia.
The government has targeted that 25 percent of its national energy mix should come from the new and renewable energy sources. Currently, the largest contributor to the new and renewable energy sources is biodiesel.
The Oil Palm Plantation Fund Management Board (BPDPKS) President Director Eddy Abdurrachman said recently that since the implementation of the mandatory biodiesel program, the palm oil industry has played an important role in realizing the national energy mix target by supplying the fatty acid methyl ester (FAME), which is derived from crude palm oil (CPO), for blending of the biodiesel.
“The palm oil industry plays an important role in driving up the growth of new and renewable energy sources in Indonesia. Currently, the biodiesel production has reduced Indonesia’s reliance on import of diesel fuel and saved foreign exchange,” said Eddy recently.
Statistics Indonesia (BPS) reported that with the biodiesel program, during the first semester 2020 Indonesia’s oil imports were cut by up to 11.73 percent or 10.33 million tons. The import value of oil also declined by 39.3 percent to US$1.98 billion.
There is no denying that BPDPKS plays a very important role in driving up the mandatory biodiesel program. Without funding assistance from BPDPKS, the price of biodiesel will be higher than the diesel fuel and, therefore, the biodiesel program could not be proceeding well as expected. BPDPKS said that it subsidizes the price of FAME as a blending substance to produce biodiesel.
BPDPKS CPO Levies Collection Division Acting Head Fajril Amirul admitted that if there is no export levies, derived from the export tax of palm oil, which are used to incentivize the biodiesel producers, then the selling price of biodiesel will be much higher than the diesel fuel. “The problem is the price of biodiesel. If there is no incentive the financial burden of biodiesel production will be borne by the public,” Fajril said.
The Indonesian Biodiesel Producers Association (Aprobi) Executive Chairman Paulus Tjakrawan said that the palm oil producers fully support the biodiesel program. Besides reducing the oil imports, the biodiesel program also helps the palm oil industries to increase the local absorption of palm oil production.
He noted that the palm oil supply is now surplus. It is mainly because a number of countries had decided to ban palm oil, which had led to a decrease of price. “The fact is that the market is oversupplied. But the biodiesel program implementation can increase the local absorption of palm oil,” said Paulus.
Paulus said that currently the total national production of CPO is around 48 million metric tons. But the local consumption of palm oil outside of the biodiesel program is only at between 9.0 – 11 million metric tons. With the biodiesel program, the domestic absorption of CPO will increase.
“Now our production of FAME stands at 68 million kiloliters. But we only use 15 million kiloliters. The local need is only 10 million kiloliters,” said Paulus.
He hopes that the government will continue the development of biodiesel program, which will increase the use of FAME in the biodiesel production. “Through the biodiesel program implementation, the local absorption of CPO will increase. It will also reduce Indonesia’s dependence on oil imports. Based on our calculation, the biodiesel program can be continually implemented and increased. It should be consistently implemented for our common interest,” said Paulus. (*)
Source: REPUBLIKA.co.id | Image via sentientmedia.org
