S

outh Korean firms are looking for biomass sources overseas, including from Indonesia, as the East Asian country is enforcing a 2012 energy policy mandating firms to resort to renewable energy to cut carbon emissions.

One of the firms, Depian Co. Ltd, is ready to pour US$20 million toward developing forest industries and a facility in Pelaihari, South Kalimantan, to supply wood pellets to South Korea, after setting an accord last March with local investor PT Inhutani III, a state firm.

For that purpose, Depian will work together with Inhutani through PT SL Agri, which 49 percent is controlled by the South Korean firm and 51 percent by domestic investors.

They will start building the facility in October and expect to start operating the plant by March 2014.

The plant will be able to produce 30,000 tons of wood pellets annually, before being upgraded to 100,000 tons annually in 2016, SL Agri president director Muhammad Akbariah said on Friday.

'€œThe project is worth $17 billion in total, with $15 billion for the development of the plant and the remaining $5 billion for planting trees on approximately 5,000 hectares to 8,000 hectares of an industrial forest that PT Inhutani III is currently preparing,'€ he said after a meeting with Depian representatives and South Korean Embassy officials.

He added that the wood pellet plant was expected to create jobs for over 200 permanent and contractual workers.

The South Korean plans to export all wood pellets produced at the plant back to South Korea, to help reduce fossil fuel consumption and boost renewable energy use to 20 percent by 2020, he said.

Renewable energy consumption in South Korea accounted for less than 1 percent in 2011 out of total energy consumption, according to the US Energy Information 2011 data.

The data also shows that South Korea relies on petroleum to meet 42 percent of its energy needs, followed by coal with 29 percent and natural gas 17 percent.

Lee Mira '€” Forestry, Agriculture, Fishery and Climate Change counsellor at the South Korean Embassy '€” said the cooperation could serve as a '€œpilot project'€ for other South Korean companies looking for partners in developing energy alternatives for their country.

She said 13 other South Korean firms were currently eyeing similar projects in Indonesia.

These companies, she said, were resorting to biomass energy because it was hard to rely on solar and wind power due to the East Asian country'€™s geographical hindrance.

'€œ[If the pilot project is successful, they] will come. They have been looking for Indonesian partners since 2012,'€ she said, adding that Indonesia was considered a promising country due to its abundant resources.

In addition to Indonesia, South Korean firms are also looking for similar opportunities in Russia and Vietnam, according to Lee.

However, she said, it had been difficult for them to find the right partner to start a project in Indonesia, and that Depian opted to collaborate with Inhutani III due to the latter'€™s status as a state-run firm.