Ministry to continue biodiesel mixing despite low realization
The Jakarta Post
The Energy and Mineral Resources Ministry's renewable energy directorate general is optimistic it can maintain its policy of blending biodiesel with diesel fuel, despite the program's realization remaining below target.
Figures from the renewable energy office show that only 1.2 million kiloliters of biodiesel were blended during the first nine months of the year, far below the government's initial target of blending 4 million kiloliters by the year's end.
'The mandatory 10 percent blending is ongoing, though not as quickly as we'd expected, mostly because of a lack of supporting infrastructure such as facilities to carry the product, as well as blending and storage facilities,' said renewable energy director general Rida Mulyana.
In September last year, the government introduced an obligation to blend diesel fuel with biodiesel for at least 10 percent of the volume. The policy is aimed at reducing the spending on oil and diesel imports, which has hurt the country's economy.
Under the initial plan, the total of 4 million kiloliters would entail the blending of 1.64 million kiloliters of biodiesel into subsidized diesel fuel, 808,000 kiloliters for power generation and 1.57 million kiloliters for industrial use.
Given the slow progress up to the third quarter of the year, the target is unlikely to be achieved, according to Rida. However, he expects to continue the program and that next year's realization will be better thanks to improved infrastructure.
'We need to continue the program because it will reduce our dependency on imports, save our foreign reserves and encourage the domestic biodiesel industry,' Rida said.
Next year, the target is to blend between 4 and 5 million kiloliters of biodiesel into diesel fuel.
Under a further policy, the mandatory blending will be raised to 20 percent in 2016 and 25 percent
To support the realization of blending of up to 20 percent, the renewable energy directorate general has conducted tests to assess potential obstacles to implementation, including cooperating with heavy-equipment users to ensure that their equipment is compatible with up to 20 percent-blended biodiesel fuel.
Moreover, the ministry is also working to ensure that biodiesel supply will be able to meet demand.
'We can still push the existing capacity to meet demand for the next five years. Currently the production capacity is around 5.6 million kiloliters,' the renewable energy office's head of environment and energy Edi Wibowo said.
Production capacity is higher than biodiesel output, which stood at 3.2 million kiloliters over the January-September period, according to figures from the renewable energy directorate general.
'By 2016, we will need around 8 million kiloliters for blending. That means we're lacking 2 million kiloliters of production capacity. However, there are new biodiesel plants in development,' Rida said.
'We need to continue the program because it will reduce our dependency on imports, save our foreign reserves and encourage the domestic biodiesel industry.'
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