Biofuel industry development in Indonesia.
At present, vegetable fuel development to replace fossil fuel still continues. Biofuel will replace premium, diesel fuel, and kerosene or petroleum. The government makes a target that between 2009 and 2010, composition of biofuel and fossil fuel will reach 15 percent compared to 85 percent.
The national need for vegetable fuel is at least 18 billion liter per year. However, limited raw materials is the main constraint because they must be shared with other industries.
The Head of National Team for Vegetable Fuel Development, Alhilal Hamdi, also declared that limited stock of one of the main raw materials of biofuel, namely ethanol, to fulfill the need for fuel became the main constraint. Ethanol available is competed over other industries. Ethanol in Indonesia is still used for alcohol industry or other industries like cigarette and plastic.
The same with another raw material of biofuel, namely Crude Palm Oil (CPO), the current production is needed more to fulfill domestic for vegetable oil raw material than for biofuel production.
Jarak Pagar (Jatropha) is one of the raw materials of biofuel that is highly recommended by the government to be developed extensively in order to fulfill the need for biofuel raw materials. Availability of seeds and limited planting land are additional constraints.
Small scale economic development among the community has not indicated significant profit level if compared to agribusiness activities in general like vegetables and fruits, thereby influencing the people's interest in developing Jarak pagar tree planting.
Uncompetitive selling price
In addition, one of the constraints in biofuel development in Indonesia is excessively high price compared to fossil fuel price. In fact, in the beginning biofuel use is expected to become alternative energy source that is inexpensive and environmentally friendly in order to replace fossil fuel that is getting more expensive.
Expensive selling price of biofuel also affects consumption level in the home country. Meanwhile, to enter export market, biofuel product are prevented by high import fee fixed by a number of destination countries amounting to 30 percent.
PT Bakrie Rekin Bio Energy, a joint venture of PT Bakrie Sumatera Plantations Tbk. and PT Rekayasa Industri, is forced to postpone the production plan of 100,000 ton of biofuel that was originally targeted to be realized at end of 2008 until end of 2009.
Several biofuel producers hope that the government can help biofuel industry players in the home country by giving incentive in the form of subsidy for biofuel sale in domestic markets. Because if the subsidy is given, biofuel selling price in domestic markets can automatically become more inexpensive than fossil fuel. Therefore, biofuel consumption level in the home country will increase in line with numerous consumers that move from using fossil fuel to biofuel.
Biofuel is renewable fuel that is produced from various vegetation raw materials (biomass), or side products of agroindustry, or recycled products from various wastes such as used vegetable oil, wood garbage, agricultural waste, and so forth.
Biofuel does not contain kerosene, but can be mixed with various products of crude oil to generate mixed fuel. Biofuel can be used in various types of engine without doing major changes. In addition, biofuel is environmentally friendly because it is biodegradable, non toxic, and not containing sulphur and aromatic.
Biodiesel is diesel motor fuel in the form of ester alkyl/fatty acids alkyl (usually ester methyl) produced from vegetable oil through trans or esterification process. Biodiesel can be produced from 100% biodiesel (B100) or mixed with diesel fuel originating from crude oil. Biodiesel can mix with diesel fuel and have better lubricating capacity. In addition, it has almost nil sulphur degree. Biodiesel type is determined by biodiesel content in the fuel.
Bioethanol is a type of biofuel that contains ethanol at a certain level and can be mixed with fuel originating from crude oil.
Ethanol or ethyl alcohol (C2H5OH) is a colorless liquid, biodegradable, contains low toxic content, and generates pollution. In addition, ethanol is high-octane fuel and can be used to increase octane level in crude oil fuel.
Ethanol can be produced from seeds such as corn, wheat, rice, and so forth. It can also be produced from non seeds such as cassava flour, sugar, and wheat, and other organic materials containing carbon.
Biodiesel production process
Biodiesel production from plants commonly performed is through a process called transesterification.
Transesterification is a chemical process exchanging alkoxy group in ester compound with alcohol. To accelerate this reaction, a catalyst is needed in the form of acid or base.
Oil producing plants contain much fatty acid. Chemically, this fatty acid is glyceride compound. In transesterification process, this glyceride compound is broken into ester and glycerol compound monomer, in addition to alcohol in a large quantity and catalyst.
Ester compound at a certain grade will become biodiesel. In transesterification process for biodiesel production from vegetation, sulphur acid (H2SO4) is usually used as chemical reaction catalyst.
Besides transesterification process, biodiesel production also goes through the following phases: plant system compression (for example, seed) to generate crude oil; separation between ester and glycerine; and purification/washing of ester compound to generate fuel grade (biodiesel).
Bioethanol production process
Bioethanol production is performed through conversion process of carbohydrate into water soluble sugar (glucose). Conversion of raw materials from plants containing carbohydrate and sugar into bioethanol is presented in the following table.
Sugar Ratio of content Total result basic Raw material in basic of material to material conversion bio-ethanol Type of plant Consump- (kg) Bio ethanol tion (liters) Cassava 1,000 250-300 166.6 6.5:1 Sweet potato 1,000 150-200 125 8:1 Corn 1,000 600-700 200 5:1 Sago 1,000 120-160 90 12:1 Molasses 1,000 500 250 4:1 Source: BPPT
Bioethanol production process is divided into several phases namely, gelatination, saccharification, fermentation, and distillation.
Raw materials of plants from which bioethanol will be produced are crushed and mixed with water so that it becomes pulp. The starch pulp is heated until it reaches 1300C for 30 minutes, and then, after it is cooled down until 550C, saccharification process is performed, namely breaking process of complex sugar into simple sugar or glucose (water soluble sugar).
It is continued with fermentation by using Saccharomyzes ceraviseze yeast to change glucose into ethanol/bioethanol.
In order to purify bioethanol to reach more than 95% degree so that it can be used as fuel, alcohol (ethanol/bioethanol) that has 40% purity must go through distillation process to separate alcohol from water.
Biodiesel specification generally refers to the standards in several countries in the world, especially the United States of America through American Society of Testing and Materials (ASTM) and Europe through European Committee for Standardization (CEN).
ASTM specification in America is contained in ASTM D 6751 provisions on biodiesel quality specification. Meanwhile in Europe, biodiesel refers to the specification according to EN 14214.
ASTM standard stipulates that biodiesel is a fuel that consists of mono alkyl ester from fatty acid long chain, which is derived from vegetable oil/animal fat. Therefore, vegetable oil or animal fat that is not processed yet cannot be classified as biofuel.
The Indonesian government also stipulates national standard for biodiesel specification, as contained in SNI 04-7182-2006.
For bioethanol specification, the government stipulates a standard based on SNI DT 27-000102006, which is determined by several parameters among others, density, liquidation point, carbon residue, water content, and so forth.
Biodiesel capability competes with petroleum diesel
As substitute of crude oil fuel, biodiesel has several superiorities, mainly higher Cetane number, lower emission level, higher flash point, excellent lubricating capacity.
Cetane number indicates delay in fuel ignition, where higher cetane number indicates a shorter time between fuel injection and fuel ignition. Higher cetane number is identical to easy start of engine in cold condition and smoother circulation of engine.
For pure biodiesel (B100), its CO2 emission can be pressed down until 73%, methane emission can be reduced to 51%, non-burning hydocarbon may decrease by 67%, carbon monoxide emission decreases by 48% and sulphur oxide can be pressed down until 100%, and other reductions of waste and potential pollution compared to petroleum diesel.
Flash point is the point on which diesel fuel is burned after reaching a certain pressure in engine so that it is burned. Biodiesel has higher burning point than petroleum diesel so that it is relatively safer, because it is not easily burned due to lower pressure.
Lubricating capacity of diesel fuel is very important, because it is highly influential on the capacity of engine for a long term, especially in maintaining the function of fuel injection component.
Biodiesel has a better lubricating capacity, since based on the specification of EPA 2006, higher content of sulphur will decrease lubricating capacity of diesel fuel.
Behind this superiority, biodiesel has a shortcoming, namely its energy content is still below petroleum diesel, because the basic nature of ester it contains is different from petroleum diesel.
Development of biofuel industry at present
Brazil and United States of America are the biggest producers and consumers of bioethanol
At present, biofuel industry in the world is still dominated by bioethanol production that reaches about 700,000 barrel per day, meanwhile, biodiesel production is only about 75,000 barrel per day in 2006.
United States of America and Brazil are main producers and consumers of bioethanol in the world. Bioethanol production of the two countries reaches 80% of total world production. Bioethanol consumption by United States of America and Brazil reaches 75% of total world consumption.
Brazil has currently exceeded bioethanol production of the United States of America, which places the country as the largest producer of bioethanol in the world, with production that reaches 320,000 barrel per day.
Besides in the United States of America and Brazil, bioethanol has also developed rapidly in European Union countries, such as Germany, Spain, and Sweden. Meanwhile, Hungary, Lithuania, and Czech Republic are new producers of bioethanol.
In Asia, bioethanol begins to develop in several countries among others, India, Thailand, China, Malaysia, and Indonesia.
Germany is the biggest producer and consumer of biodiesel
Biodiesel develops rapidly in Europe, with production that reaches 88% of total world production that reaches 75,000 barrel per day in 2006.
Germany is the largest producer and consumer of biodiesel in the world, with production almost 50% of total world production. Other main producers of biodiesel in Europe are France, Italy, Austria, Czech Republic, and Poland.
Riau and North Sumatera are potential areas of biofuel industry in Indonesia
Biofuel industry in Indonesia just enters initial development phase, since awareness of maintaining crude oil potentials and preparing new renewable energy sources have just been performed in the last two years.
Large-scale biofuel development project is being prepared by several national and multinational private companies in Indonesia.
The majority of biofuel plants currently still have a relatively small scale, because most of them are owned by several survey institutions as pilot projects.
In 2006, there were only 2 large-scale biodiesel plants in Indonesia, namely PPKS in Medan and Eterindo in Gresik. For ethanol production, at present, there are 9 ethanol plants with total production capacity of 133,632 kiloliter, and some of them begin to produce in 2007.
Several large biofuel producers that begin to operate in 2007 integrate with oil palm plantation among others, PT Musimas with capacity of 100,000 ton per year in North Sumatra and PT Prajona Nelayan with capacity of 60,000 ton per year in Riau.
At present, the Indonesian government has determined Dumai, Riau, as the largest biodiesel development center in Indonesia, considering abundant supply of raw materials among others, oil palm in this area, and supported by availability of port facility and existence of the largest biofuel processing plant, namely PT Wilmar Bioenergi with production capacity of 350,000 ton per day.
The need for biofuel triggers increase in ethanol production
The increasing need for biofuel also encourages the development of ethanol industry in Indonesia. At present, there are 9 companies with total production capacity of 133,632 kiloliter.
From these 9 companies, only 2 of them producing ethanol with specification for fuel/bioethanol, namely PT Bukitmanikam Subur Persada in Lampung and PT Indo Acidama Chemical in Surabaya. Total production capacity of these companies reach 93,282 kiloliter per year.
Economic aspects of biofuel
The government through the National Team for biofuel fuel Development has estimated investment cost that must be spent for biofuel development in Indonesia until 2010, with attainment of targeted use of 10% biodiesel and 5% bioethanol, is Rp 200 trillion.
The investment cost includes construction of infrastructures, such as roads and seaport, biofuel plant, development of oil palm, jarak, sugarcane, corn, cassava plantations, and so forth, that constitute raw materials of biofuel and development of technology and human resources.
Investment and production cost of biodiesel plant
In order to attain the government's target of 10% biodiesel use in total consumption of fuel in Indonesia in 2010, there must be biodiesel production of 2.41 million kiloliter available (about 2.12 million tons).
Therefore, if average production capacity of biodiesel plant is 60,000 ton, about 35 biodiesel processing plants will be needed in 2010 to serve domestic needs.
Referring to the research of Palm Oil Institute, the construction of biodiesel processing plant with oil palm as raw material requires investment of Rp 2 million per ton, outside the cost for oil palm plantation development.
The construction of 35 biodiesel processing plants requires investment cost of about Rp 4.2 trillion and oil palm planting area extending 630,000 hectare.
Raw material is the largest component in biodiesel production cost
CPO raw material is the largest component in biodiesel production cost structure, because from biodiesel production cost per liter for a plant with capacity of 60,000 ton, 84% of it is CPO raw material cost.
For a plant with capacity of 60,000 ton per year, the production process cost reaches Rp 700/liter and raw material cost (CPO) reaches Rp 3,666/liter. With this condition, total biodiesel cost per liter reaches the price at Rp 4,366. Therefore, with selling price of Automotive Diesel Oil (ADO) at Rp 5,300, the gross margin thereof reaches Rp 934/liter or 17.6% of the selling price.
Production engine is the largest investment of bioethanol plant
Based on the research of BPPT, investment cost for the construction of bioethanol processing plant consists of production engine, supporting equipment, waste treatment, power generator, and land and building.
For the construction of bioethanol plant with production capacity amounting to 8,000 liter per day or 2.56 million liter per year, investment cost amounting to US$ 7.38 million is required, where 76% thereof is procurement cost of main production engine.
Component of bioethanol production cost is based on cassava
BPPT surveys production cost structure in bioethanol production by using cassava that reaches total cost of Rp 2,400/liter.
In order to produce 1 liter of bioethanol, 6.5 kg of cassava is required, at average price of Rp 180 per kg, therefore, the cost of cassava in bioethanol production is Rp 1,170 or almost 50% of total production cost per liter.
In addition to the main raw materials, namely cassava, in the conversion of plants containing starch or carbohydrate into bioethanol, supporting materials of glucose production process and glucose fermentation process into ethanol are also required. Production cost of ethanol per liter is total use cost of raw materials, supporting materials, and utilities.
CPO and Jatropha are main raw materials of biodiesel
Crude Palm Oil (CPO)
Indonesia is the largest CPO producer in the world, and together with Malaysia supply about 85% of the world need for Palm Oil.
Indonesia and Malaysia will allocate 40% of their production for biodiesel development, because of increasing need for biofuel at present. Rapid increase in the need for palm oil-based biodiesel in Europe, encourages Indonesia and Malaysia to increase their palm oil production.
In Indonesia at present, there are hundreds of oil palm plantation companies, and almost all major oil palm plantation companies have their own CPO processing facilities. Meanwhile, small companies sell their products in the form of hands of fresh fruits, which are sold to CPO processing companies.
Although there is a considerable number of oil palm plantations in Indonesia, palm oil industry is still dominated on the whole by some major domestic and foreign companies only.
Indonesia determines that in 2009, it will take over the position of Malaysia as the biggest palm oil producer in the world and in 2015, the biggest palm oil exporter.
The majority of oil palm planting area are situated in Sumatera, namely Riau and North Sumatera, and Kalimantan. From total 6.075 million hectare of oil palm planting area in Indonesia, 24% is in Riau and 17.2% in North Sumatera, meanwhile the total planting area in Kalimantan reaches 19.4%.
In addition to the planting area extent that keeps increasing, CPO production indicates a gradual increase as well. It is recorded that in 2001, CPO production reached 8,396,472 ton, and then increased in 2002 to 9,622,345 ton, and continuously increased to 13,390,807 ton in 2006.
Palm oil is the main raw material of biodiesel. The industry thereof is currently controlled by several business groups, both government (Nusantara Group Plantation), national private, and foreign companies. Malaysia is a country that has made a major investment in oil palm in Indonesia, through its business groups.
Jatropha Curcas is a species of plant that becomes alternative raw material for biodiesel production, because of limited availability of palm oil that is also raw material for various products of food, cosmetic, and so forth, and export quality products in the form of CPO, it becomes a relatively expensive raw material for biodiesel production.
Jatropha can be processed simply by extracting its seeds to be changed into high quality biodiesel with a relatively inexpensive processing cost.
Jatropha grows normally until 3-5 meter high in many regions in Indonesia among others, Kalimantan, Sumatera, Java, and Papua, although the land condition is different from one another.
This plant can also grow normally in a damaged land due to over cultivation, although the productivity thereof is relatively lower than the one planted in fertilized soil.
Development of Jatropha is the government's target to be performed by farmers and village people, and the government has allocated Rp 1 trillion to help farmers and village people to plant Jatropha more, in order to attain production target of more than 15,000 ton of biofuel from Jatropha at end of 2007.
Sugarcane and cassava are main raw materials of bioethanol
In Indonesia, bioethanol is produced from various raw materials among others, sugarcane, cassava, corn, potato, and so forth. Sugarcane and cassava are main raw materials that are currently used to produce bioethanol, because not only the productivity per hectare is the highest, but the planting period is relatively short as well.
The research of BPPT indicated that in order to produce 1 liter of bioethanol, 15 kg of sugarcane is required, whereas for cassava, 6.5 kg only.
Although, sugarcane is needed more to produce 1 liter of bioethanol, the productivity of sugarcane per hectare is far higher, namely 80 ton/hectare, whereas cassava is only 25 ton per hectare.
Sugarcane planting area in Indonesia in 2006 has reached 433,332 hectare, which the majority thereof is situated in East Java and Lampung.
The development of sugarcane planting area is relatively stagnant since the last 8 years, with area extent ranging from 340,000 hectare. The extent of sugarcane plantation area began to increase in 2004, which reached 344,793 hectare, higher than the previous year, which reached 335,735 hectare.
In 2005, the extent of sugarcane planting area increased quite significantly compared to 2004, as of the government's proclamation of targeted self-supporting in sugar in 2009.
Cassava is a potential raw material for bioethanol production. Its easy planting and care and growing capacity in various types of soil, make this plant a superior plant to be developed by people in rural areas, including in critical soil with low fertility rate.
Lampung is the largest cassava planting area in Indonesia with the extent of 298.48 million hectare, followed by East Java 241.2 million hectare and West Java 215.52 million hectare.
Waste cooking oil is another potential of raw material for biodiesel
Waste cooking oil is a waste and if viewed from the chemical composition thereof, it contains carcinogenic compounds, which occur during the frying process. Continuous use of waste cooking oil can damage human health, and cause cancer disease.
Therefore, appropriate handling is required so that waste cooking oil can be useful and not inflicting a loss from human health and environmental aspects.
One of cooking oil waste benefits is to change it chemically into biodiesel. This can be performed because cooking oil waste is vegetable oil as well, derived from CPO (crude palm oil). Biodiesel production from cooking oil waste applies transesterification reaction as in biodiesel production in general, with pretreatment to decrease acid point in cooking oil waste.
The following is comparison of emission generated by biodiesel from cooking oil waste (Altfett Methyl Ester/AME) and diesel oil (ADO):
The table reveals that biodiesel from cooking oil waste is alternative fuel that is environmentally friendly like biodiesel from other vegetable oil. The emission gas test result indicates that AME has lower degree of emission gas than diesel fuel.
Biodiesel from cooking oil waste also fulfills SNI requirements for biodiesel. The following is laboratory test on comparison of various parameters between biodiesel from cooking oil waste and diesel fuel, and SNI requirements for biodiesel:
Physical nature Unit Result Flash point [degrees]C 170 Viskositas (40[degrees]C) cSt. 4.9 Bilangan setana - 49 Cloud point [degrees]C 3.3 Sulfur content % m/m <<> Calorific value kJ/kg 38,542 Density (15[degrees]C) Kg/l 0.85 Gliserin bebas Wt.% 0.00 Standard SNI of ASTM Biodiesel Physical nature (Diesel oil) Flash point Min. 100 Min. 100 Viskositas (40[degrees]C) 1,9-6,5 2.3-6.0 Bilangan setana Min. 40 Min. 48 Cloud point - Max. 18 Sulfur content 0.05 Max Maks.0.05 Calorific value 45.343 -- Density (15[degrees]C) 0,84 0.86-0.90 Gliserin bebas 0.02 Max. Max. 0.02 Source: BPPT
However, the main problem is difficult accumulation of cooking oil waste, because besides the distribution thereof is quite extensive and uneven, keeping cooking oil waste has not become the people's life habit, because the cooking oil waste is frequently rejected to the rivers or drainage, so that it can become one of the pollution sources in the rivers.
Therefore, support from the central government and regional government is required to handle cooking oil waste to become biodiesel, as already performed by the government of Guangzhou, China. Guangzhou is the third biggest city in China that has succeeded in processing cooking oil waste amounting to 20,000 ton per year into biodiesel because of local government's support (Y Wang et al, 2006).
Therefore, cooking oil waste use as diesel fuel is a method of waste (cooking oil wast) dumping that generates economic value and creates alternative fuel for diesel engine that is ethical, economical, and ecological.
Domestic market need is dominated by biodiesel
The Ministry of Energy and Mineral Resources has prepared a Road Map on biofuel development and projection on biofuel needs in 2005-2025.
The need for biofuel is dominated by biodisel, which is projected to reach 2.41 million kiloliter in 2010, whereas bioethanol will reach 1.48 million kiloliter. The need originates from 40% of needs in transportation sector and 74% in industry and power generator sectors.
Europe is potential market of biodiesel
Although the development of biofuel industry in Indonesia is given priority to fulfill domestic market need, export market potential is not ignored by investors, since export markets such as Europe and America have been established with quite considerable need. At present, biofuel use reaches 1% of liquid fuel consumption for the world's transportation sector, especially Europe, North America, and Latin America.
Europe is a prospective export market for biodiesel product, because of numerous uses of cars with diesel fuel, and almost 80% of biodiesel use in Europe is for transportation sector. In addition, European market keeps experiencing a lack of biodiesel supply because of limited land extent for development of biodiesel raw material.
At present, about 2% of agricultural land in Europe is planted with plants for biofuel raw materials among others sunflower. European Union production target for biofuel is about 24 million ton per year. This amount will require 15-18 million hectare of agricultural land or 15-17% of total 103.6 million hectare of land in European Union. The considerable extent of land use for biofuel raw materials makes the European Commission plan that they will only produce 50% of their need for biofuel and the remaining will be imported.
Biofuel distribution and sale
Pertamina is the only biofuel distributor at present
As state-owned companies, PT Pertamina and PT PLN are stipulated as permanent buyers/standby offtakers and obliged to purchase biofuel production from producers that will reach about 23,000 production units in 2010. Until now, Pertamina is the only party allowed to sell and distribute biofuel in Indonesia. Pertamina must gradually replace crude oil fuel with biofuel, especially for transportation need.
Marketing Division Head of PT Pertamina (Persero), Djaelani Soetomo in Surabaya explained that until now, biosolar purchase could be served in just 201 gas stations (SPBU) in Jakarta, Bogor, Depok, Tangerang, Bekasi with average selling volume of 3,600 kiloliter (kl) per month.
Whereas in Surabaya, the sale of biosolar that is a mixed product between 95 percent of diesel fuel and 5 percent of CPO can only be found in 15 gas stations. Average selling volume per month is about 1,650 kl.
In the whole country, biopremium that is a mixed product of 97 percent of pure premium and 3 percent ethanol can only be found in gas station 54 651 43 at Jalan Mayjen Wiyono, Blimbing Sub-district, Malang Regency, East Java, with average selling volume of 320 kl per month.
Meanwhile, biopertamax (consisting of 3 percent of ethanol and 97 percent of pure pertamax), which was marketed only in four gas stations in Jakarta, starting from June 11, 2007, was expanded to five gas stations in Surabaya and three gas stations in Malang. Average selling volume is about 10 kl per day in Jakarta and predicted about 5 kl per day in Surabaya and Malang.
Biofuel distribution target by Pertamina
Since the distribution of several biofuel products in 2006, Pertamina continues to distribute the products in order to attain a composition of 10% biofuel in fuel-based oil mixture according to the government's policy.
Pertamina's target in 2008 is to attain distribution of Biodiesel (B5) and Biopremium (E5) for transportation needs in 2 big cities in Java, and Biopertamax (E5) for 4 big cities in Java and Bali.
Subsequently, in 2009-2010 Pertamina targets the attainment of distribution of Biodiesel (B10) for 5 big cities in Java, and fulfillment of 5% of need in industrial sector and 5% in power generating sector.
Pertamina's target in 2011- 2012 is to attain distribution of Biodiesel (B10) for transportation needs in big cities in Java, Sumatera, and Kalimantan, and can fulfill 10% of need in industrial sector and 10% in power generating sector.
Biofuel sale is still in initial phase
Since the launch of biodiesel product in 2006, biofuel sale is currently still relatively small or about 14% of potential need for biofuel if mixture of 10% biofuel is attained in 2011-2012. The current sale reached 595,000 kiloliter of biosolar from May 2006 to August 2007, which was sold in 213 gas stations in Jakarta and Surabaya.
Biopremium that was sold only in Malang, East Java, was sold amounting to 4,200 kiloliter from one gas station. Meanwhile, Biopertamax was sold amounting to 4,300 kiloliter in Jakarta, Surabaya, and Malang.
22 Power Plants of PLN (State Power Company) use biofuel
As one of standby offtakers appointed by the government together with Pertamina, PT PLN begins to use biofuel in some of its power plants that use diesel fuel. PLN plans to use vegetable fuel (BBN) or biofuel for 114 of its small power plants throughout Indonesia. Vegetable fuel will replace diesel fuel that has been used by PLN all this time to activate diesel-powered electric generator (PLTD). 114 small power plants are situated outside Java Island and 22 of them have begun to operate with biofuel starting from 2007.
Foreign gas stations will be allowed to purchase and sell biofuel
The government will in a short time allow foreign gas stations such as Petronas Malaysia and Shell Netherlands to get involved in biofuel distribution in order to encourage competition in domestic markets.
The Deputy for Agriculture and Marine Affairs in the Coordinating Minister for Economy, Bayu Krisnamurti, said that foreign companies would be allowed to buy biofuel from producers and can sell it again to the people, provided that it is used for transportation sector.
All this time, many investors are not interested yet in developing biofuel plant, because they are afraid that Pertamina will buy their products at low price. The permission for parties outside Pertamina to purchase and sell biofuel will encourage investors to improve production capacity of biofuel plant, because there will be a competition in the sale of biofuel plants' products, thereby creating a reasonable price.
Rapid growth in quantity and capacity of biofuel plants will encourage production target attainment of 13 million ton of biofuel per year in 2009.
Development of biofuel price in the world
Development of biofuel price in the world is presented in the following table:
Development of biofuel price in Indonesia
Until now, biofuel selling price in Indonesia, mainly biodiesel, is still higher than the price of crude oil, because almost all raw materials for biodiesel production still use CPO (crude palm oil) that the price thereof in the world keeps increasing now.
The high need for CPO by various industrial sectors in the home country encourages the high price of CPO. Meanwhile, the use of other raw material like Jarak Pagar (Jatropha Curcas) is still very limited, because it is just developed and the distribution thereof is not as extensive as oil palm plantation.
The price of biopremium is relatively lower than that of biosolar, in which the difference of price between biopremium and premium from crude oil is only Rp 9/ liter, whereas the difference of price of biosolar is Rp 52/liter from the price of ADO.
Several government policies concerning biofuel industry are contained in a number of instructions and decrees of the President and decrees of the Minister of Energy and Mineral Resources and Directorate General of Oil and Natural Gas issued in 2006.
The government supports biofuel development
The Indonesian government has stipulated a policy on national energy in the Instruction of the President No. 05 of 2006, as a direction for arrangement of national energy.
This policy targets reduction of energy use from crude oil, so that the contribution thereof will only reach about 20%, and improvement in non-fossil energy use, by increasing contributions from biofuel, geothermal energy, and other renewable energies in mixed energy in 2025.
The government has allocated Rp 13 trillion and 500,000 hectare of land for biofuel development in 2008. From this amount, Rp 10 trillion will be used for development of infrastructures, such as irrigation system and road access to the development area of biofuel raw material plantation. The national banking will financially support in the form of loan granting until Rp 20 trillion for this industry development.
The government suggests that biofuel industry should have its own raw material plantation, mainly oil palm, in order to avoid raw material fight with other industries, so that there is guarantee for biofuel industry development.
The government prepares tax incentive and biofuel investment
The Minister of Finance is preparing incentive package now to support the government's support to produce 200,000 barrel of biofuel per day in 2010. The planned incentive will consist of tax reduction and subsidy granting in loan interest.
Based on the incentive planning, tax reduction will be given during the first year of the company's operation for biofuel production and raw material production. Meanwhile, loan interest subsidy will be performed so that investors do not pay loan interest more than 10% per year.
In order to overcome lack of energy source due to decreasing crude oil production, the government triggers investment for alternative energy development, both for domestic investment (PMDN) and foreign investment (PMA).
In January 2007, the government has signed 58 investment agreements with the value of US$ 12.4 billion from 59 foreign and local investors, for the development of oil palm plantation and processing facility thereof. The foreign investors are among others Chinese oil company, CNOOC, which will make investment of US$ 5.5 billion cooperating with Sinar Mas Agro Resources, and Malaysia through Genting Biofuel Asia will make investment of more than US$ 3 billion in this industry.
Main players of biofuel industry in Indonesia
PT Eterindo Wahanatama Tbk is a holding company engaged in chemical industry. The company that went public in 1992 keeps spreading its business wings until it owns a number of subsidiaries that are also engaged in chemical industry sector.
Eterindo controls shares in several subsidiaries that are also engaged in chemical industry and produce biodiesel. Several groups of companies that produce biodiesel among others, PT Eternal Buana Chemical Industries, PT Eterindo Nusa Graha, and PT Anugerahinti Gemanusa.
Eterindo Group is an integrated chemical industry. Several chemical products of Eterindo Group are Phthalic Anhydride, Plasticizers, Unsaturated Polyester Resins, Alkyd/Amino Resins, and Synthetic Latex Resins. As we know, Phthalic Anhydride is a raw material to produce Dioctyl Phthalate (DOP).
Since 2005, Eterindo established biofuel industry with CPO raw material in its plant in Gresik, East Java. In its initial production, biofuel capacity was just 120,000 ton per year. According to the plan, Eterindo will increase its biofuel capacity to 350,000 ton per year in 2007. At present, biodiesel product of Eterindo is mainly for industrial consumption, whereas for automotive sector is being prepared, because special try-out should be performed. In addition, it must wait for biodiesel commercial order from the government and biodiesel quality standardization.
PT Molindo Raya engaged in fermentation industry is a main Ethanol producer in Indonesia. With installed capacity of 40,000 Kl/day (330 working days per year), its operating capacity is [+ or -] 35,000 Kl/year.
The main raw material used is Molasses from sugar factories in East Java. In order to guarantee continuous operation of Ethanol industry because molasses supply is only performed in sugarcane press season, PT Molindo Raya has provided molasses collecting tank with capacity of [+ or -] 50,000 ton as Buffer Stock when sugar factories are not operating.
PT Molindo Raya produces Ethanol with super prime quality with purity:
97% v/v--Super Quality
96.5% v/v--Prime Quality
95% v/v--Technical Grade Quality
99.9% v/v--Absolute Ethanol
The majority of this product is to fulfill domestic need and the remaining is to fulfill export market need. Domestic use of Ethanol is commonly used in the following industries:
* Cosmetic & Perfume Industry
* Beverage Industry
* Cigarette Industry
* Pharmaceutical, Medical Doctor, Traditional Medicine Industries
* Paint, Printing, and Solvent Industries
* Raw materials of Acetate Acid, Ethyl Acetate, and Acrylic
* and so forth.
* Molindo has developed biofuel from molasses since three years ago. At present, Molindo produces ethanol for motor vehicle fuel amounting to 10,000 kiloliter per year.
PT Molindo will increase pure ethanol production from 40,000 kiloliter to about 60,000 to 70,000 kiloliter per year. Pure ethanol is ethanol with 96.5% degree. Ethanol of this type is used for industry. Meanwhile, Ethanol Absolute production with 99.9% degree that is used for biofuel is not yet improved because there is no increase in demand yet from Pertamina.
Wilmar Group Plantation is a PMA (foreign investment) company that constitutes a business group engaged in agribusiness of oil palm plantation sector spread in Sumatera and Kalimantan. Biodiesel plant of Wilmar Group is situated in Dumai, Riau, with production capacity of 350 thousand MT per year.
This plant is operated by PT Wilmar BioEnergi Indonesia (WBI). WBI is a subsidiary of which 100% shares are owned by Wilmar International Ltd. and it was established on July 20, 2006 with issued and paid up capital amounting to US$ 5 million. The main activity of WBI is to produce and market biodiesel from oil palm. Investment to establish the plant was US$ 20 million and it started operating in January 2007.
Wilmar will increase its production capacity by constructing two plants more, each will have capacity of 350 thousand MT per year. With total investment of about US$ 35 million. With the two new plants, total production capacity will increase to 1.05 million MT per year.
In addition, Wilmar Group will also hold an acquisition on 5 companies of oil palm plantation in Kalimantan, namely PT Daya Landak Plantations, PT Indoresins Putra Mandiri, PT Pratama Prosentindo, PT Putra Indotropical, and PT Tri Tunggal Sentra usaha Buana. From the acquisition on these five companies, the landbank thereof will increase to 85 thousand hectare, with acquisition value of US$ 5,842,386.
PT Sumi Asih was established in 1982 and started producing in 1984, by producing Oleochemical with Palm Oil as raw material, with production capacity of 84,000 Metric Ton (MT) per year. Biodiesel has been developed by PT Sumi Asih since March 2006 with production capacity of 3,000 ton of biodiesel per month, and then the production capacity was increased to 5,200 ton per month, so that total capacity of biodiesel reached 8,200 ton per month or about 100,000 ton per year.
Starting from April 2007, PT Sumi Asih Oleo Chemical Industry has been performing export sale of biodiesel to the United States of America. The President Director of PT Sumi Asih, Alexius Darmadi, said that his company has acquired biodiesel sale contract to Houston, United States of America, starting from May 2006. In order to realize biodiesel export target, Sumi Asih, has made investment of about 15 million US dollar. This company is also preparing the development of biodiesel plant in Lampung. Investment for the plant with production capacity of 200,000 ton of biodiesel per year is calculated to reach 27 million US dollar.
New investment plan
Palm oil is still relied for biodiesel development
The increase in the world CPO price is bad news for biodiesel producers that depend on palm oil as raw material, because not only reduction of supply in the home country because of increase in CPO export sale, there is also keen competition with other industrial sectors using CPO as raw material.
This condition encourages major investors to invest in biofuel industry based on oil palm, resulting in plants integrated with CPO industry. Although at present, biofuel competitiveness is lower than oil-based fuel, the business activity thereof can continue because of high selling price of CPO.
PT Asian Agro is a company that will develop biodiesel with planned capacity of plant of 150,000 ton/year. Bakrie Group that will make investment in biofuel industry will invest about 25 million US dollar in the construction of its plant, and will develop thousands of hectares of oil palm plantation to supply raw material needs.
Wilmar Group that has developed biofuel industry with production capacity of 350,000 ton/year in Dumai, Riau, will develop its industry to several regions in Sumatera and Kalimantan, with production capacity target of 1,000,000 ton/year.
Foreign and local companies will compete in bioethanol development
Several groups of major local and state-owned companies will immediately compete with foreign companies that are interested in developing bioethanol industry in Indonesia.
Several local players that will develop this industry are Salim Group, which plans to develop 70,000 hectare of sugarcane planting, with 70,000 kiloliter of production capacity, and Sampoerna group that will construct bioethanol plant with production capacity of 375,000 kiloliter per year, in Madiun, Jawa Timur.
Medco Group that continues to develop as an energy company, will immediately build bioethanol industry in Lampung, West Java, and Kalimantan with extent of about 50,000 hectare, and production capacity planned to reach 270,000 kiloliter.
Several PTPN based on sugarcane will also develop bioethanol among others PTPN 2,8,9,10,11,14 in North Sumatra, Lampung, South Sulawesi, Java, and East Nusa Tenggara.
Biofuel development prospect
The government's target in biofuel development is to increase the use percentage of biofuel in national mixed energy until 5% in 2025. Therefore, the dependence on fossil fuel as the main supplier of energy source can be gradually reduced. This is to anticipate the depletion of crude oil and coal reserves and reduce exhaust gas emission from the remaining hydrocarbon burning. The reduction of crude oil use will lower the government's subsidy with the value of Rp 60.6 trillion in 2006, because until now, 43% of fossil fuel need is still imported.
The increase in the use of biofuel will trigger the development of plants and plantations of oil palm, Jarak Pagar, sugarcane, cassava, and other biofuel raw materials, which will then improve the need for human resources.
Oil palm still becomes the most reliable commodity of biofuel raw material. Therefore, in 2010, it is projected that 1.5 million hectare of new planting area will develop, with potential production estimated to reach 6 million ton of biodiesel and will use more than 750,000 trained and untrained workers. Biofuel development based on oil palm will invite investment of about Rp 55 trillion for on farm and off farm developments.
The depletion of fossil energy source reserve in Indonesia and in the world, make humans realize more on the importance to prepare a substitute energy source.
Biofuel that is expected to overcome the issue on limited natural resources of crude oil and other fossil energy, cannot automatically settle the issue, because the development of biofuel raw materials requires extensive planting area, therefore, the place where biofuel raw materials will be developed becomes a special issue. In addition, considerable need for seeds is another constraint.
The development of biofuel industry will on one hand trigger the improvement in new job opportunities, thereby improving the people's living standard, but will cause potential environmental damage as well.
The development of new planting area to fulfill the need for raw materials will change ecosystem in an area, considering the need for land for biofuel development is million hectare of land that the majority thereof is forest area.
In addition, the development of biofuel industry requires supporting external factors, one of them is crude oil price. The increasing price of the world's oil highly affects the development of this industry, since the increasing price of crude oil will impact the difficulty to obtain CPO that is one of the main raw materials of biofuel in Indonesia. Export sale of CPO will be far more profitable in this condition than producing biofuel to fulfill domestic need.
Therefore, the use of other raw materials that have high economic value and not the main raw material of other industries, and can be adaptively developed in various regions in Indonesia, is an important factor that can support the development of biofuel industry, and apart from negative influence of fluctuating crude oil price.
Table - 1 Potential plants for ethanol development in Indonesia Plant Part of plant Ethanol productivity (L/ha/year) Cassava Root 4,500 Sweet potato Root 7,800 Sugar cane Stalk 5,000 - 6,000 Corn Grain 5,000 - 6,000 Sorghum Grain 5,500 - 6,000 Sago Stalk 4,000 - 5,000 Aren Sap 40,000 Nipah Sap 5,000 - 15,000 Lontar Sap 8,000 - 10,000 Coconut Sap 8,000 - 10,000 Paddy Stalk 1,000 - 2,000 Forest plants Wood waste - Source: BPPT Table - 2 Biodiesel Specification based on SNI 04-7182-2006 No. Parameter Units Value 1. Density at 40[degrees]C Kg/m3 850-890 2. Kinematic viscocity at 40[degrees]C Mm2/s(cst) 2.3-60 3. Cetane number Min 51 4. Flash point (close cup) [degrees]C Min 100 5. Cloud point [degrees]C Max 18 6. Cooper strip corrosion Max No. 3 (3 hours at 50[degrees]C) 7. Carbon residu at original sample Max 0.05 at 10% destillation waste Max 0.30 8. Water and sediment % vol Max 0.5 * 9. Destillation temperature 90% [degrees]C Max 360 10. Sulfated ash % weight Max 0,02 11. Sulfur Ppm-m(m.kg) Max 100 12. Phosforous Ppm-m(mg/kg) Max 10 13. Acid number Mg-KOH/g Max 0.8 14. Free glycerin % weight Max 0.02 15. Total Glycerin % weight Max 0.24 16. Linolenic acid methyl ester % weight Max 96.5 17. Lodine Value % weight Max 115 9g-12/100 18. Helphen test Negative Source: Directorate General of Oil and Natural Gas Table - 3 Bioethanol Specification based on SNI DT 27-000102006 No. Parameter Units 1. Density at 15[degrees]C Kg/m3 2. V Kinematic Viscocity at 40[degrees]C Mm2/s 3. Cetane number / index 4. Flash point 40[degrees]C [degrees]C 5. Liquidation point [degrees]C 6. Copper strip corrosion (3 hours at 500C 7. Carbon residue % weight 8. Water content Mg/kg 9. T90/95 [degrees]C 10 Oxidation stability g/m3 Super Density at 15[degrees]C 820-860 V Kinematic Viscocity at 40[degrees]C 2.0 - 4.5 Cetane number / index [greater than or equal to] 51/48 Flash point 40[degrees]C [greater than or equal to] 55 Liquidation point [less than or equal to] 18 Copper strip corrosion [less than or equal to] 1st (3 hours at 500C class Carbon residue [less than or equal to] 0.30 Water content [less than or equal to] 500 T90/95 [less than or equal to] 340/360 Oxidation stability [less than or equal to] 25 Regular Density at 15[degrees]C 815-870 V Kinematic Viscocity at 40[degrees]C 2.0 - 5.0 Cetane number / index [greater than or equal to] 48-45 Flash point 40[degrees]C [greater than or equal to] 60 Liquidation point [less than or equal to] 18 Copper strip corrosion [less than or equal to] 1st (3 hours at 500C class Carbon residue [less than or equal to] 30 Water content [less than or equal to] 50 T90/95 < 370 Oxidation stability - Source: Directorate General of Oil and Natural Gas Table - 5 Energy content of Biodiesel and Petroleum diesel Fuel type Btu/b Btu/gal Petroleum diesel 18,300 129,050 Biodiesel 16,000 118,170 Source: Directorate General of Oil and Natural Gas Table - 6 Development of producer and production capacity of biofuel, 2007 Production Company Location capacity (ton / year) Lemigas Jakarta 16,000 BPPT Serpong 1,000 BPPT Pemda Riau Kampar 3,000 ITB Bandung Bandung 50 PT Rajawali Nusantara Indonesia West Java 50 (RNI) PPKS Medan 30,300 PT Anugrah Inti Gemanusa (Eterindo) Gresik 120,000 PT Ganesha 77-PTPN 4 Medan 3,000 PT Sumi Asih Bekasi 100,000 BPPT Ekuin Jambi 300 BPPT Ekuin Sumedang 300 BPPT Ekuin Solok 300 PT RAP Jakarta 500 PT Wilmar Bioenergi Indonesia Dumai 350,000 PT Energi Alternatif Indonesia Jakarta 300 PT Musi Mas North Sumatra 100,000 PT Karya Prajona Nelayan North Sumatra 100,000 Total 825,100 Source: DESDM Table - 7 Development of ethanol production capacity, 2006 (Kiloliter) Production Raw Company Location capacity material PT Aneka Kimia Nusantara Mojokerto 5,000 Molasses PT Basis Indah Sulawesi 1,600 Molasses PT Bukitmanikam Subur Persada Lampung 51,282 Molasses PT Indo Acidama Chemical Surabaya 42,000 Molasses PT madu Baru Yogyakarta 6,720 Molasses PT Molindo Raya Industrial Malang 40,000 Molasses PT Perkebunan Nusantara 11 Bondowoso 6,000 Molasses PT Rodhia Manyar Gresik 11,000 Molasses B2TP, BPPT Lampung 30 Cassava Total 163,632 Source: DESDM Table - 8 Production capacity and investment of biodiesel plant and oil palm plantation area required Production capacity Investment Oil palm plantation area (tons/year) (Rp billion) required (Ha) 300 0.7 90 3,000 6.0 900 6,000 12.0 1,800 30,000 60.0 9,000 60,000 120.0 18,000 100,000 200.0 30,000 Source: Palm Oil Institute Table - 9 Production cost of biodiesel plant in Indonesia Ukuran Cost process Raw material pabrik (CPO) (Ton/Year) Rp/liter % Rp/liter % 6,000 1,000 21.4 3,666 78.6 30,000 800 17.9 3,666 82.1 60,000 700 16.0 3,666 84.0 100,000 600 14.1 3,666 85.9 Ukuran Total of pabrik cost Gross margin (Ton/Year) Rp/liter Rp (bill.) % 6,000 4,666 634 12.0 30,000 4,466 834 15.7 60,000 4,366 934 17.6 100,000 4,266 1,034 19.5 Source: Palm Oil Institute Assumption : CPO price = Rp 3,375/kg, 1 kg CPO = 1,0864 liter CPO price = Rp 3,666/ liter ADO price = Rp 5,300/liter Table - 10 Investment cost structure of bioethanol plant Investment US$ (000) % Main production machines 5,580 75.61 Supporting equipment 400 5.42 Waste treatment unit 690 9.35 Land (at least 30 hectares) 60 0.81 Power generators 450 6.10 Factory and office buildings 200 2.71 Total 7,380 100 Source: BPPT Table - 11 Bioethanol production cost Consumption / 1 Price/unit Total cost Cost components liter of bio (Rp/liter) ethanol Main basic material Cassava 6.5 kg Rp 180 1,170 Additional basic material Alpha amylase (kg) 0.8 45 36 Gluco Acid (L) 1.3 60 78 Sulphate Acid (L) 0.2 0.65 0.13 NaOH (L) 1.25 10 12.5 Urea (kg) 4 1.2 4.8 NPK (kg) 1.5 3 4.5 Antifoam (ml) 0.25 35 8.75 Water (L) 20.5 0.75 15.4 Steam (kg) 5.1 170 867 Electricity 1.3 150 195 Total cost 2,400 Source: BPPT Table - 12 of oil palm planting area in Indonesia, 2001 - 2006 (000 Ha) State Small owned Private Growth Year holder enterprise company Total (%) 2001 1,561 610 2,542 4,713 - 2002 1,808 632 2,627 5,067 8% 2003 1,854 663 2,766 5,284 4% 2004 2,220 606 2,459 5,285 0% 2005 2,357 530 2,567 5,454 3% 2006 2,636 697 2,742 6,075 11% Source: Directorate General of Plantation--Ministry of Agriculture Table - 13 Development of oil palm planting area extent, 2001--2006 (000 ha) Small State owned Private Growth Year holder enterprise company Total (%) 2001 2,798,032 1,519,289 4,079,151 8,296,472 -- 2002 3,426,740 1,607,734 4,587,871 9,622,345 14.6 2003 3,517,324 1,750,651 5,172,859 10,440,834 8.5 2004 3,847,157 1,617,706 5,365,526 10,830,389 3.7 2005 4,500,769 1,449,254 5,911,592 11,861,615 9.5 2006 5,130,635 1,935,826 6,324,346 13,390,807 12.9 Source: Directorate General of Plantation--Ministry of Agriculture Table - 14 Business groups that constitute main players of oil palm plantation in Indonesia Country of ultimate Land bank Group ownership (Ha) Anglo Eastern Malaysia 33,692 Astra Agro Singapore 290,621 Bakrie Indonesia 80,000 Benua Indah Indonesia 180,000 Ballore France 37,467 Bumi Flora & Indonesia 11,982 Parasawita Cargill USA 27,000 Carson Cumberbatch Sri Langka/ 15,934 Ceylon CDC UK 30,625 Cisadane Indonesia 20,652 Dutapalma Indonesia 60,000 Golden Hope Malaysia 72,000 Hasil Karsa Indonesia 14,000 Hasko Indonesia 8,000 Incasi Raya & Metro Indonesia 200,000 Johor Malaysia 140,000 Kuala Lumpur kepong Malaysia 52,000 Kumpulan Guthrie Malaysia 215,973 Kuok Malaysia 57,927 Lyman Indonesia 160,000 Musi Mas Indonesia 60,000 Napan & Risjadson Indonesia 340,000 Oriental Malaysia 43,900 Perkebunan Nusantara Indonesia 770,000 Raja Garuda Mas Indonesia 543,000 REA UK 125,000 Rowe Evans UK 35,304 Salim Indonesia 230,000 Sinar Mas Indonesia 591,000 Sipef Belgium 65,000 Sungai Budi Indonesia 62,015 Surya Dumai Indonesia 154,133 Tirta Mas & Maharani Indonesia 270,000 Wilmar USA/China -- Total areal dan produksi di Indonesia -- CPO Planted area production Group (Ha) (Ton) Anglo Eastern 18,389 63,240 Astra Agro 189,970 543,635 Bakrie 34,681 55,401 Benua Indah -- -- Ballore 37,467 182,628 Bumi Flora & -- -- Parasawita Cargill 27,000 100,000 Carson Cumberbatch 12,557 26,570 CDC 22,731 100,000 Cisadane -- -- Dutapalma 42,000 -- Golden Hope 8,014 -- Hasil Karsa -- -- Hasko -- -- Incasi Raya & Metro -- -- Johor 19,622 -- Kuala Lumpur kepong 31,808 -- Kumpulan Guthrie 162,213 329,524 Kuok 9,708 16,100 Lyman -- -- Musi Mas -- -- Napan & Risjadson 40,534 259,492 Oriental -- -- Perkebunan Nusantara 561,126 2,094,364 Raja Garuda Mas 317,850 600,000 REA 13,209 28,557 Rowe Evans 25,136 -- Salim 161,973 775,651 Sinar Mas 282,000 1,105,000 Sipef 29,364 127,003 Sungai Budi 12,000 -- Surya Dumai 23,975 -- Tirta Mas & Maharani 105,282 Wilmar -- -- Total areal dan produksi di Indonesia 4,100,000 9,020,000 Source: Ministry of Agriculture Table - 15 Productivity comparison Jatropha in different land condition Description Poor soil Normal soil Fertilied soil Planting density 2 x 1,5 2 x 2 2 x 3 Populasi/hektar 3,330 2,500 1,670 Seed yield/plant 2 nd year 200 gram 1,000 gram 2,500 gram Oil/kg 30%-35% 220 kg 830 kg 1,461 kg Cake/kg 65-70% 450 kg 1,625 2,714 Revenue @Rp 3.000/kg oil 1,360,000 2,490,000 4,383,000 Revenue @Rp 750/kg oil 337,500 1,218,750 2,035,500 Gross total (Rp) 1,687,500 3,708,750 6,418,500 Source: Ministry of Agriculture Table - 16 Comparison of raw materials producing bioethanol Raw material Weight (kg) Bio ethanol (L) Sugar cane 15 1 Mollase 4 1 Cassava 6.5 1 Corn 2.5 1 Sorghum 2.8 1 Sweet potato 8 1 Sago 12 1 Source: BPPT Lampung Table - 17 productivity comparison and planting period of bioethanol raw materials Harvesting Productivity Frequency of Raw material (Months) (Tons/Ha) harvesting per annual Cassava 10 25 1x Corn 3,5-4 8 2x Sorghum 3,5-4 4,5 3x Sweet potato 4 20 2x Sago 96 30 - Sugar cane 10 80 1x Source: BPPT Lampung Table - 18 Distribution of cassava planting area in Indonesia Average Province Area Productivity production (million Ha) (Tons/year) (Tons/Ha) North Sumatra 27.60 411.94 14.90 Lampung 298.48 4,984.62 16.70 Central Java 114.69 1.651.48 14.40 West Java 215.52 3.469.80 16.10 Yogyakarta 47.48 764.41 16.10 East Java 241.20 3.786.88 15.70 South Sulawesi 41.88 607.29 14.50 West Nusa Tenggara 8.28 88.57 10.70 East Nusa Tenggara 75.51 808 10.70 Papua 3.83 40.93 10.69 Others 114.44 1,705.23 14.90 Indonesia 1,239.86 18,479.96 14.90 Source: Central Bureau of Statistic (BPS) Table - 19 Comparison of emission generated by diesel fuel (ADO) and biodiesel from cooking oil waste Description AME Solar NO emission 1.005,8ppm 1,070ppm CO emission 209ppm 184ppm CH emission 13,7ppm 18.4ppm Dust emission 0,5 0.93 SO2 emission none Source: BPPT Table - 20 Biofuel development roadmap and use projection in, 2005 - 2025 Year 2005-2010 2011-2015 Biodiesel Use of biodisel up Use of biodisel up to 10% of 2.41 to 15% of 4.52 million Kl of million Kl of consumption of consumption of diesel oil fuel diesel oil fuel Bioethanol Use of bioethanol Use of bioethanol up to 5% of 1.48 up to 10% dari million Kl of 2.78 million Kl of consumption of consumption of gasoline gasoline Bio-Oil Biokerosene Use of bio- Use of bio- kerosene up to kerosene up to 1.8 1million Kl million Kl Pure Plantation Use of PPO up to Use of PPO up to Oil (PPO) for 0.4 million Kl 0.74 Kl power plants Biofuel Use of bio-fuel up Use of bio-fuel up to 2% of 5.29 to 3% of 9.85 million Kl of million Kl of energy mix energy mix consumption consumption Year 2016-1025 Biodiesel Use of biodisel up to 20% and 10.22 million Kl of consumption of diesel oil fuel Bioethanol Use of bioethanol up to 15% form 6.28 million Kl of consumption of gasoline Bio-Oil Biokerosene Use of bio- kerosene up to 4.07 million Kl Pure Plantation Use of PPO up to Oil (PPO) for 1.69 Kl power plants Biofuel Use of bio-fuel up to 5% dari 22.26 million Kl of energy mix consumption Source: Ministry of Energy and Mineral Resources Table - 21 Development of biofuel selling locations Products City Total number Volume of SPBU (KL/day) Bio solar (B5) Jakarta 201 1,200-1,300 Bio solar (B5) Surabaya 15 80-100 Bio premium (E3) Malang 1 8-10 Bio Pertamax (E3) Jakarta 4 10 Bio Pertamax (E3) Surabaya & Malang 8 5 Source: Pertamina Bio solar (B5) : mixture of 5% FAME (Fatty Acid Methyl Ester) with 95% ADO Bio premium : mixture of 5% ethanol with 95% gasoline (premium) Bio pertamax : mixture of 3% ethanol with 97% pertamax Table - 22 Biofuel distribution target of Pertamina 2008-2012 2008 2009-2010 Biodiesel (B5) Biodiesel (B10) Transport for 2 large Transport for 5 large cities in Java cities in Java Biopremium (E5) Biopremium (E10) Transport for 2 large Transport for kota-large cities in Java cities di Jawa Biopertamax Biopertamax (E10) Transport for 4 large Transport for large cities cities in Java and Bali in Java and Bali 2008 2011-2012 Biodiesel (B5) Biodiesel (B10) transport Transport for 2 large for large cities in Java, cities in Java Sumatra and Kalimantan Industry (10%) of Electricity (10%) Biopremium (E5) Biopremium (E10) Transport for 2 large Transport for kota-large cities in Java cities di Jawa dan Sumatera Biopertamax Biopertamax (E10) Transport for 4 large Transport for large cities cities in Java and Bali di Java and Bali and Sumatra Source: Pertamina Table - 23 Biofuel sale in Indonesia (May 2006 - August 2007) Products City/Area Launching date Number of Volume of products SPBU (kilo- liter) Bio Solar Jabotabek 20 May 2006 202 595,000 Surabaya 12 August 2006 11 Bio Premium Malang 13 August 2006 1 4,200 Bio Pertamax Jakarta 11 December 2006 14 Surabaya 11 June 2007 6 4,300 Malang 11 June 2007 4 Source: Pertamina Table - 24 Power plants of PLN with biodiesel Power Plant Location Capacity (KW) PLTD Muara Teweh- Central and South 4,250 Kuala Kapuas Kalimantan PLTD Bangkalan Bun Central and South 2,984 Kalimantan PLTD Buntok - Kuala Kapuas Central and South 4,052 Kalimantan PLTD Kota Baru Central and South 4,140 Kalimantan PLTD Pagatan- Kota Baru Central and South 4,530 Kalimantan PLTD Petung East Kalimantan 9,834 PLTD Long Ikis East Kalimantan 2,448 PLTD Melak East Kalimantan 1,294 PLTD Kota Bangun East Kalimantan 2,070 PLTD Nunukan East Kalimantan 4,958 PLTD Tanjung Selor East Kalimantan 4,290 PLTD Malinau East Kalimantan 1,120 PLTD Gunung Sitoli- Nias North Sumatra 4,590 PLTD Piru - Ambon Maluku 750 PLTD Bula Maluku 375 PLTD Sofifi Maluku 740 PLTD Malifut Maluku 540 PLTD Maffa Maluku 158 PLTD Kairatu Maluku 700 PLTD Masohi Maluku 700 PLTD TB Karimun Riau Island 13,000 PLTD Teluk Kuantan Riau Island 1,100 Source: Ministry of Energy and Mineral Resources Table - 25 Development of biofuel price in the world ADO Gasoline Fame Ethanol (US$/Ltr) (USC/Ltr) (US$/Ltr) (US$/Ltr) August 2006 0.543 0.498 0.586 0.552 September 2006 0.477 0.404 0.547 0.549 October 2006 0.447 0.379 0.547 0.547 November 2006 0.440 0.385 0.539 0.550 December 2006 0.438 0.415 0.569 0.553 January 2007 0.415 0.373 0.616 0.554 February 2007 0.444 0.406 0.604 0.554 March 2007 0.462 0.467 0.608 0.548 April 2007 0.508 0.512 0.651 0.552 May 2007 0.513 0.556 0.693 0.568 June 2007 0.514 0.517 0.761 0.559 Source: Pertamina ADO = Automotive diesel oil Fame: Fatty acid methil ester/ biodiesel Table - 26 Price comparison between biofuel and fossil fuel, 2007 Biosolar (B2,5) Rp 4,958 /liter ADO Rp 4,906 /liter Biopremium (E3) Rp 4,723 /liter Gasoline Rp 4,714 /liter Source: Pertamina Table - 27 Government policies on biofuel Government policies Issuing date Contents Presidential Instruction 25 January 2006 Provision and No. 1/2006 utilization of vegetable fuels as alternative fuels Presidential Regulation 25 January 2006 National energy policy No. 5/2006 Presidential Decision 24 July 2006 Setting up of a No. 10/2006 National Team for Development of Vegetable Fuels to accelerate reduction of poverty and unemployment rates Decision of Oil and Gas 17 March 2006 Quality standards of Dir.Gen. No. 3674 gasoline, for domestic K/24/DJM/2006 market and maximum limit of 10% for the use of ethanol in gaoline Decision of Oil and Gas 17 March 2006 Quality standards for Dir.Gen. No. 3675 diesel oil for domestic K/24/DJM/2006 market and maximum limit of 10% for the use of biodiesel in diesel oil. Decision of Oil and Gas 26 September Quality standards for Dir.Gen. No. 13483 2006 biodiesel as K/24/DJM/2006 alternative fuel for domestic market. Decision of Energy and 10 October 2006 -Trade procedure of Mineral Resource biofuel as alternative Minister No. 051/2006 fuel -To secure supply of buiofuel for domestic consumption -Biofuel exports and imports must be with recommendation fo the Energy and Mineral Resources Minister. Source: Ministry of Energy and Mineral Resources Table - 28 Mixed energy use according to the target of the Regulation of the President No. 5 of 2006 Target as set in Presidential Regulation No. Types of energy 2005 5/2006 Petroleum 49.2% [less than or equal to] 20% Natural Gas 18.9% [greater than or equal to] 30% Coal 24.4% [greater than or equal to] 33% Biofuel 0% [less than or equal to] 5% Geothermal 5.2% [less than or equal to] 5% Other renewable 2.7% [less than or equal to] 5% sources of energy Liquefied coal 0% [less than or equal to] 2% Total 100% 100% Optimistic target according to Energy Blue Types of energy print Petroleum 26.20% Natural Gas 30.60% Coal 37.70% Biofuel 1.4% Geothermal 3.80% Other renewable 5.30% sources of energy Liquefied coal 0% Total 100% Source: Ministry of Energy and Mineral Resources Table - 29 Biodiesel development plan, 2008 - 2010 Width of Planned cultivated prod. area capacity Companies Location (hectares) (kiloliter) Wilmar Group Sumatra, Kalimantan 180,000 1,000,000 Pertamina Dumai, Balikpapan 500,000 Sinar Mas Dumai, West Kal., 440,000 400,000 Merauke Bakrie Rekin Sumatra, Java 100,000 tons Indofood Sumatra, Kalimantan 250,000 Asian Agro Sumatra 150,000 tons Sumiasih Bekasi, West Java 100,000 tons Aprobi Group Kalimantan 100,000 BP East Nusa Tenggara, 100,000 Papua, Kalimantan Sweden East Nusa Tenggara 100,000 350,000 Bioenergy Indomal Sulawesi, Merauke 300,000 Sinar mas West Kalimantan, 440,000 Merauke Genting Group Merauke 400,000 Muting Group Merauke 290,000 Asiatic Group West Kalimantan 80,000 Tolaram West Kalimantan 110,000 Indomal + PTPN Medan, Banten Pekan 1,500,000 Baru Clean Biofuel Gorontalo 50,000 Source: Ministry of Energy and Mineral Resources Table - 30 Bioethanol development plan, 2008 - 2010 Width of cultivated Planned pro. ares capacity Companies Location (hectares) (kiloliter) Salim Group South Sumatra 70,000 70,000 Sungai Budi Lampung 25,000 120,000 Sugar Group Lampung, South Sumatra, Kalimantan 200,000 500,000 Wilmar Group Lampung, South 70,000 70,000 Sumatra Molindo Lampung, Kediri, 25,000 100,000 Pacitan Sampoerna Madiun 100,000 375,000 Mitsui Petrobas Papua, Kalimantan 200,000 500,000 PTPN North Sumatra, 2,8,9,10,11,14 Lampung, South 100,000 200,000 Sulawesi, Java, NTT Sorini Tbk Southeast Sulawesi 150,000 200,000 EN3 Korea South Sulawesi 45,000 180,000 Medco Lampung, West Java, 50,000 270,000 Kalimantan Source: Ministry of Energy and Mineral Resources Table - 31 Projection on the needs for land, manpower, and investment for biofuel development, based on Blue Print Biofuel industry in Indonesia in 2010 Parameter Oil palm Jatropha curcas Workers 750,000 500,000 employed directly Workers 1,167 68,182 employed indirectly Income/capita Rp20,000,000 Rp13,500,000 (Sugar @0.5ha /year/person /year/person, Cassava, Oil palm @ 2ha Jatropha curcas @ 3ha) Bio ethanol / 6,000,000 2,250,000 biodiesel (Ton) Production (ton 30,000,000 7,500,000 seeds,unit) Industry (unit) 167 22,727 Cultivated area 1,500,000 1,500,000 (ha) Seedlings 202,500,000 3,750,000 (unit) Plantation Rp 45 trillion Rp 4.5 trillion investment (on farm) Processing Rp 10 trillion Rp 2.27 trillion investment (off farm) Parameter Sugracane Cassava Workers 1,500,000 750,000 employed directly Workers 6,250 11,538 employed indirectly Income/capita Rp9,140,600 Rp12,000,000/ (Sugar @0.5ha /year/person, year/person Cassava, Oil palm @ 2ha Jatropha curcas @ 3ha) Bio ethanol / 3,750,000 4,615,386 biodiesel (Ton) Production (ton 60,000,000 30,000,000 seeds,unit) Industry (unit) 125 288 Cultivated area 750,000 1,500,000 (ha) Seedlings 6,000,000 12,000,000 (unit) Plantation Rp11.25 trillion Rp 5.25 trillion investment (on farm) Processing Rp 43.75 trillion Rp 43.27 trillion investment (off farm) Parameter Total Workers 3,500,000 employed directly Workers 87,137 employed indirectly Income/capita Rp 54,640,600 (Sugar @0.5ha /year/person Cassava, Oil palm @ 2ha Jatropha curcas @ 3ha) Bio ethanol / 16,615,385 biodiesel (Ton) Production (ton 127,500,000 seeds,unit) Industry (unit) 23,307 Cultivated area 5,250,000 (ha) Seedlings 224,500,000 (unit) Plantation Rp 66 trillion investment (on farm) Processing Rp 99.29 trillion investment (off farm) Source: Ministry of Energy and Mineral Resources
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|Title Annotation:||INDUSTRY PROFILE|
|Publication:||Indonesian Commercial Newsletter|
|Date:||Jan 1, 2008|
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