he emergence of a food-versus-fuel dilemma in Indonesia has added to concern that a push for palm oil-based biodiesel will drive deforestation.
Consumption of palm oil for biodiesel in Indonesia surpassed that for food for the first time last year, Indonesian Palm Oil Association (GAPKI) data show, with 46 percent of a total 23.2 million tonnes going to biodiesel and 44 percent to food production. Ten percent was used for oleochemicals.
Eliza Mardian, a researcher at the Center of Reform on Economics (CORE), said the continuing rise in domestic demand for biodiesel might see new land cleared for oil palm to increase output of the commodity.
“The increasing demand for palm oil for fuel and food may encourage deforestation, especially in eastern Indonesia, to increase production,” she told The Jakarta Post on Friday.
Read also: Exports down 10 percent on plummeting coal prices, CPO volume
The massive push for biodiesel usage, supported by Rp 30 trillion (US$1.9 billion) to Rp 50 trillion in annual funding from the Indonesian Oil Palm Plantation Fund Management Agency (BPDPKS), had long been predicted to have side effects, Jakarta-based think tank Energy Shift Institute said in a report published on Feb. 9.
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