April 26, 2021 | Invest Indonesia

Indonesia is world’s largest biodiesel producer: Hartarto

Source from: Antara News

Original News HERE

Indonesia is globally the largest producer of biodiesel, with daily output touching 137 thousand barrels, which is much higher compared to the United States, Brazil, and Germany, Coordinating Minister for Economic Affairs Airlangga Hartarto said.

“Indonesia is the largest biodiesel producer in the world, with a capacity of 137 thousand barrels of oil per day. Meanwhile, the United States (is next) with 112 thousand barrels, Brazil with 99 thousand barrels, and Germany with 62 thousand barrels of oil per day,” the minister disclosed at an online discussion originating from Jakarta on Monday.

This success has positioned Indonesia as a country to be reckoned with in the world biodiesel market, he said.

Biodiesel is a biofuel comprising a mixture of methyl ester compounds of long-chain fatty acids, and is used as an alternative fuel in diesel engines.

Indonesia uses crude palm oil, or CPO, as the main raw material for producing biodiesel. It chose palm oil because its cultivators are well-established considering Indonesia’s position as the second largest producer of palm oil in the world, Hartarto said.

Scientists are mixing 30 percent of palm oil into diesel oil to make B30, which is being used to increase national energy security and independence, increase the added value of the palm oil industry, reduce consumption of imported fuel oil, and cut greenhouse gas emissions, the minister added.

“In the framework of climate change, Indonesia is committed to reducing greenhouse gas emissions by 29 percent from business as usual, and 41 percent with international assistance by 2030,” he reiterated.

Indonesia has been producing biodiesel for quite some time. In 2008, the country’s commercial biodiesel production reached 630 thousand kiloliters, with consumption pegged at 23 thousand kiloliters. Most of the production at the time was export-oriented.

Every year, Indonesia’s biodiesel production rate has experienced positive growth — with output surging 300 percent to 8.5 million kiloliters in 2020 from 3 million kiloliters in 2016.

President director of the Palm Oil Plantation Fund Management Agency (BPDP-KS), Eddy Abdurrachman, said the increase in the market index price for palm oil from time to time has resulted in the rise in the price of biodiesel, which tends to be more expensive than diesel.

“The price of CPO is increasing, while CPO is the main fuel for biodiesel, which causes the price of biodiesel to be relatively high compared to the price of diesel,” Abdurrachman elaborated.

According to government projections, additional incentives for the mandatory biodiesel program this year will reach Rp46 trillion, in line with the huge gap between crude oil and palm oil prices.

Reporter: Sugiharto, Azis Kurmala
Editor: Fardah Assegaf