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tate-owned oil and gas giant Pertamina is planning to construct a bioavtur plant in 2017 in support of the government'€™s program to reduce the use of fossil fuel in the aviation industry, an official has said.

Pertamina technology and product development manager Andianto Hidayat said that the company was finalizing a feasibility study for the bioavtur plant.

'€œThe feasibility study will be completed within the next six to eight months, and [the plant] will be ready for groundbreaking in 2017. The construction itself may take up two years. Hopefully, the bioavtur plant will be on stream in 2018,'€ Andianto told a discussion on green aviation at the Transportation Ministry on Wednesday.

The company, he said, could not yet reveal the location of the plant, but hinted that it would be built near an international airport in Java or Sumatra.

Investment between US$450 million and US$480 million with a production capacity of 260 million liters per year were the plant'€™s current estimates, the official went on.

He added that the domestic market was predicted to take up only around 10 percent of total production, so, if other countries in the region issued a policy on the mandatory use of bioavtur, Pertamina would be called on to supply the product, given the world'€™s dearth of bioavtur plants.

To secure the supply of CPO required to produce the bioavtur, Pertamina would cooperate with palm oil companies in the plant construction, he said.

'€œWe will form a joint venture with palm oil companies,'€ Andianto said, declining to name the companies.

The Transportation Ministry'€™s Bali and Nusa Tenggara airport authority chief Yusfandri Gona, who is also the chairman of the Indonesia Aviation Biofuels and Renewable Energy Taskforce, said that the ministry supported the plan and would help Pertamina bring it to fruition.

'€œWe really hope that the plan will be realized because soon enough there will be more demand for bioavtur and we need the supply,'€ Yusvandri said. '€œMoreover, the government has issued the regulation on bioavtur in line with the ICAO program,'€ he continued, referring to the International Civil Aviation Organization.

In 2013, the Energy and Mineral Resources Ministry issued Ministerial Regulation No. 25/2013 on biofuel, requiring the aviation sector to reduce the use of fossil fuel by including at least 2 percent biofuel in its avtur starting in January 2016, with the percentage set to increase to 3 percent in January 2020 and 5 percent in January 2025.

As evidence of the government'€™s commitment to realizing the 2 percent biofuel target, the government will hold the second International Green Aviation Conference (IGAC) 2015 in Bali from August 19 to 21, themed '€œTowards Carbon Neutral Growth by 2020'€.

The 2015 IGAC will be attended by up to 170 participants from 11 countries, including aircraft manufacturers, airlines, airport operators, aircraft maintenance companies, oil companies and associations.