T

he government and palm oil stakeholders still believe that the biodiesel consumption target will be achieved by year-end despite Pertamina’s recent move to temporarily halt sales in Jakarta, Wst Java and Banten following contamination.

The state-owned oil and gas firm found out two weeks ago that some of its biodiesel distributed from the Plumpang fuel terminal in North Jakarta was contaminated by water.

The terminal, which delivers fuel to 819 of the 1,417 gas stations in the region, received a supply of fatty acid methyl esther (FAME) — a substance for biofuel blending — from major palm oil producers Musim Mas and Wilmar.

The biofuel, which it dubs “biosolar”, has been replaced by subsidized diesel fuel, sold at its regular price of Rp 5,100 (38 US cents) per liter.

The Energy and Mineral Resources Ministry has strong doubts that the sales break will greatly affect the goal of absorbing 3 million kiloliters of diesel containing biofuel in the domestic market by the end of this year.

The ministry’s secretary for the new and renewable energy directorate general, Dadan Kusdiana, said the halt would likely impact only on a small portion of all biofuel sold nationwide.

“The issue is still under investigation and now the new and renewable energy directorate general is evaluating the process with biodiesel players to ensure that such a problem does not repeat itself,” Dadan told The Jakarta Post on Tuesday. He added that the full-year figure would likely range between 3 million and 3.2 million kl.

The mandatory biodiesel mix is part of the government’s policy to increase the use of non-fossil fuels.

Under the program, biofuel — mostly made of palm oil — is set to gradually replace diesel fuel, a measure that would reduce the country’s high levels of carbon emissions and its heavy dependence on petroleum-based fuel.

In addition, a bigger domestic absorption of palm oil, of which Indonesia is the world’s top producer, could push up the commodity’s price that has been plunging amid global economic deterioration.

The diesel and biofuel blend has continuously increased from 10 percent in 2013 to 15 percent last year and to 20 percent this year.

The mandatory biodiesel program was previously funded through the state budget, but since July last year has been backed up by levies on crude palm oil (CPO) exports managed by the Indonesian Oil Palm Estate Fund (BPDP).

BPDP chief Bayu Krisnamurthi has also doubted that Pertamina’s actions would significantly affect the final amount of biodiesel consumed by the end of the year as the case was one-off and not spread across the country. However, Bayu, a former vice trade minister, estimated that the annual consumption would only reach around 2.8 million kl this year due to the low number of non-subsidized diesel containing biofuel.

Sharing a similar view with Dadan and Bayu, Biofuel Producers Association (Aprobi) secretary general Togar Sitanggang underlined that the temporary sales halt was “inconsequential to the final target”.

Pertamina’s marketing director Ahmad Bambang said the firm would likely resume distribution of biofuel from all gas stations in JAkarta, West Java and Banten this week as the police have almost completed their probe over the FAME tanks at the Plumpang fuel terminal.