T

he government needs to give the public a thorough explanation on the new biodiesel regulation in a bid to minimize resistance from diesel consumers, within the mining industry and among vehicle owners.

Diesel distributor PT Jasatama Petroindo'€™s director, Suryanto, said that consumers, particularly within the mining sector, would likely object to the regulation, which requires biodiesel content in diesel fuel to be 10 percent.

According to him, several of Jasatama Petroindo'€™s consumers had refused to purchase the non-subsidized diesel containing only 5 percent of biodiesel.

The new biodiesel regulation will require a minimum of 10 percent biodiesel in diesel fuel mixes used for industrial and commercial purposes as of January 2014. The existing rule stipulates that diesel fuel mixes used for industrial and commercial purposes should contain at least 5 percent biodiesel.

'€œSeveral mining companies will reject the regulation on concerns that using diesel with higher levels of biodiesel will affect the engines of their heavy equipment and transportation vehicles,'€ he said.

The new regulation, published by the Energy and Mineral Resources Ministry, stipulates that diesel should be mixed with biodiesel on a ratio of 90:10 percent. The decree is intended to push down diesel imports to combat the current-account deficit and weakening rupiah.

The decree, while also making the fuel-blending requirement mandatory, stipulates that the fatty acid methyl ester (FAME) content in the subsidized diesel mix, will have to be increased to 10 percent from 2.5 percent (in the current rule) as of September this year.

Subsidized fuel for transportation purposes is mainly distributed by state-owned oil and gas corporation PT Pertamina, along with other parties assigned by the government.

The FAME content for non-subsidized diesel for transportation purposes must also be increased to 10 percent from the previous 3 percent level as of January next year.

Non-subsidized diesel for transportation purposes is distributed by Pertamina and private petroleum firms Shell and Total.

According to Suryanto, diesel distributors in the country would have no problem following the new rule, considering that the existing infrastructure was sufficient enough to start the program.

The government, however, should increase public awareness of the new policy; especially the fact that diesel with higher FAME levels would not affect their vehicles.

A similar concern was raised by Shell Indonesia spokesperson Inggita Notosusanto, who said original equipment manufacturers (OEMs) should offer assurances that their products were compatible with a 10 percent biodiesel mix.

'€œWill car users buy [the 10 percent biodiesel fuel] if there'€™s no warranty?'€ she said.

Meanwhile, the secretary-general of the Association of Indonesian Automotive Manufacturers (Gaikindo), Juwono Andrianto, said the government should instead ensure that biodiesel producers in the country could produce FAME at a quality that would not hurt engine performance.

'€œIt is impossible to ask sole-authorized agents [ATPMs], car producers or let alone OEMs to provide a guarantee for customers. It is the biodiesel producers who must give their assurances that their products will not damage engines,'€ he said.

Commenting on this, the Energy and Mineral Resources Ministry'€™s director general for renewable energy and energy conservation, Rida Mulyana, said that his office had met with related associations to promote the new regulation.

'€œOf course, we will conduct a field check to ensure the biodiesel specifications are safe to be utilized,'€ he said.

Indonesia currently imports around 35 million kiloliters (Kl) of diesel oil per year, including 17.5 million Kl of subsidized diesel oil.

The country has the capacity to produce 4.6 million Kl of biodiesel per year, but only 2.2 million Kl of capacity was sold last year, of which only 750,000 Kl went to the domestic market while the rest was exported due to low domestic demand, according to data from the Agency for the Assessment and Application of Technology (BPPT).