Indonesia's venture into the bioenergy sector should pair up well with Austria's expertise in the field, thus providing new opportunities for economic cooperation between the two countries.
Indeed, the energy sector has long been the cornerstone of the economic relationship between the two countries, with Austria being a primary supplier of the turbines and generators used in hydropower plants across Indonesia. In addition, Austria sells other machinery, chemicals and pharmaceuticals to Indonesia. For its part, Indonesia exports electrical appliances, garments and footwear to the central European nation.
All this has resulted in two-way trade that rose 12 percent last year to reach 290.8 million euros (US$349 million). Austrian investment in Indonesia, meanwhile, stood at $5 million in 2005, more than quadrupling from $1.2 million the previous year.
Regarding the bioenergy sector, Austria sees a potential market here for gas engines -- which are at the heart of any biogas power plant -- and business opportunities for its construction firms in the building of biodiesel plants.
Jenbacher, Austria's leading manufacturer of gas engines, estimates there will be a market for an additional 500 megawatts (MW) in gas-engine capacity in Indonesia over the next five years, the company's sales and services director Eugen Laner said.
Jenbacher, a subsidiary of U.S. energy giant General Electric, has to date installed 45MW of gas-engine capacity in Indonesia. These engines can run on any type of gas, produce both heat and electricity, and to date have mostly being installed as backup generators for textile plants. The company says it wants to capture 40 percent of the future market for 500MW of gas-engine capacity.
""There will be an increasing need in the future for gas-fired power plants, whether to directly supply the grid or to be operated in island-mode, particularly if the government encourages the development of rural biogas plants, as in India and Thailand,"" Laner said.
Meanwhile, Bioenergy research and engineering firms, BioDiesel International and Energea, are looking to participate in the planning, design and construction of multifeed biodiesel plants, as they have done for clients in Europe, the U.S. and Australia. As yet, however, neither company has secured a project in Indonesia.
The government plans to build 11 biodiesel plants by 2010 -- with each of the Rp 60-billion ($6.5-million) plants producing up to 1.3 billion liters of biodiesel a year -- as part of its bioenergy-development strategy.
Meanwhile, Indonesia is looking to supply the European market with palm-oil and jatropha-based biodiesel, although this will depend on Indonesia's own production capacity and domestic needs. In addition, Europe is at present mostly self-sufficient from its own rapeseed-based biodiesel.
Nevertheless, Austria can still offer Indonesia other trading opportunities, said Reinhart Zimmerman, the Austrian Federal Economics Chamber (Aussenwirtschaft sterreich)'s South and Southeast Asia regional director. These included supplying processed food, handicrafts and furniture to the Austrian market of 8 million people.
""There is now a growing trend among the Viennese to incorporate a touch of Asia into their homes,"" Zimmermann said. ""Traditional furniture and handicrafts from Indonesia could exploit this niche market.""
Strategically located at the heart of Europe, Austria could also serve as a gateway for Indonesian products to both the continent's western and eastern regions.
-- Urip Hudiono
