The Indonesian government continues to push for the development of bioenergy through a blend of diesel fuel and 35 percent palm oil, known as the mandatory biodiesel B35 program. The campaign is strengthened with the introduction of a vision for Indonesia to produce fuel that is 100 percent derived from palm oil, known as B100.
Santosa, CEO of PT Astra Agro Lestari (AALI), recently shared his views on the ambition of achieving energy self-sufficiency through plant-based fuels.
“Production capacity of palm oil, or crude palm oil (CPO), is a crucial factor in realizing the target of achieving energy self-sufficiency through plant-based fuels,” Santosa told a CEO Talk event in Bandung on Friday, February 16,2024.
He noted that Indonesia’s palm oil production has stagnated at around 51 million tons per year. Of this, approximately 8 million tons are used for domestic household and industrial consumption.
Meanwhile, the B35 program requires about 12 million tons of palm oil annually. Santosa calculates that producing B100 would require at least triple palm oil amount, totaling around 36 million tons. The increase in palm oil consumption for bioenergy is considered to potentially erode export volumes.
According to Santosa, if all palm oil production is used for domestic needs without exports, the implementation and development of biodiesel would be challenging. This is because the mandatory biodiesel program has been partly funded by the export levy on palm oil through Palm Oil Plantation Fund Management Agency (BPDPKS).
“Without exports, who will foot the bill? Unless palm oil prices plummet while oil prices soar, eliminating the need for subsidies. But in the current situation, biodiesel needs support from export levies,” Santosa explained.
Presidential hopeful Prabowo Subianto has earlier expressed his desire for Indonesia to not rely on petroleum imports, while believing that Indonesia is capable of producing plant-based fuel that is emission-free and environmentally friendly. Prabowo is optimistic that through this green fuel, Indonesia will no longer import petroleum and achieve energy self-sufficiency. “We will become the only country in the world capable of producing fuel from plants, and this is healthy,” Prabowo said.
