TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Removing the barriers to sustainable palm oil
The painful reality is that the country’s palm oil production seems to have reached its peak and is now on a downward trend.
Change Size
Good haul: A worker harvests fresh fruit bunches (FFB) on May 12, 2022 at the Namorambe oil palm plantation in Deli Serdang, North Sumatra. (AFP/Andi)
C
oordinating Maritime Affairs and Investment Minister Luhut Panjaitan is confident that Indonesia can sustainably replace fossil fuels with biofuels sourced from palm oil and stop oil imports, which drain billions of dollars from Indonesia’s foreign reserves annually.
“We are currently doing research on palm oil as an alternative renewable fuel because we believe that by 2045, we can [annually] produce around 100 million tonnes of palm oil, with 30 percent of the output directed for food and the remaining 70 percent for biofuels,” Luhut asserted early this year.
Luhut said that palm oil is one of the five pillars of the green economy that Indonesia is prioritizing. The other four pillars are decarbonization of the electricity sector, low-carbon transportation through the massive adoption of electric vehicles, green industry, and carbon sinks which include carbon capture and the carbon offset market.
As the world's largest producer of crude palm oil (CPO), biodiesel and used cooking oil, Indonesia has implemented a mandatory program to use CPO-based biodiesel since 2008. Currently, the government is encouraging the use of B35, a blend of 35 percent biofuel sourced from palm oil and 65 percent fossil fuel. The government also funds research on the 1.5th and 2nd generation of biofuels, namely green gasoline, green avtur (sustainable aviation fuel) and green diesel.
Luhut’s claim that fossil fuels will be completely replaced by palm oil-based fuels in Indonesia may seem overly optimistic. However, his observation asserts the vital role of palm oil in Indonesia’s economy as a major employer, source of food and consumer goods and the third largest export. The country, richly endowed with land suitable for oil palm plantations, has the potential to triple its output.
Even if Indonesia increases its palm oil output to more than 100 million tonnes annually, that will not glut the domestic and international markets because palm oil will continue to play an increasingly vital role in the global economy as a source of biofuels, among other things. The commodity is relatively inexpensive, highly versatile, and fulfills more than 40 percent of the global demand for vegetable oil on less than 6 percent of all land dedicated to producing vegetable oils.
The big question is whether Indonesia can double its palm oil output from the current 50 million tonnes per year, and the outlook seems rather gloomy. Potential is one thing, but realizing that potential is something else altogether.
