90
Zone (SBZ) program by encouraging each region to develop its biofuel potential
were expected to contribute to national energy security.
The progress of the implementation of the biofuel development plan in Indonesia
as of early 2009 is illustrated in Table 8.2 above.
8.2.2 Overview of Main Biofuel Market Conditions in
Indonesia
8.2.2.1 Biodiesel from Palm Oil and Jatropha
For biodiesel, palm oil is the main feedstock, based on Indonesia’s well-established
palm oil industry, with a total plantation area estimated to be over 6 million hectares. Indonesia surpassed Malaysia to become the world’s largest palm oil producer
in 2008, producing 18 billion liters (OECD-FAO 2008).
The global price of palm oil soared from mid-2006 to the middle of 2008, partly
due to its popularity as a major biodiesel feedstock. As a result, biofuel production
from palm oil became unprofitable. Initial estimates that palm oil-based biodiesel
would be competitive to conventional oil at $400 per metric ton, or about $54 per
barrel, proved to be wrong. When oil prices peaked above $140 per barrel, the price
of palm oil rose even higher making biofuels more expensive to produce. Pertamina
suffered losses from its biofuel blends because the government required it to sell
Table 8.2 Progress of biofuel development in Indonesia
As of early 2009
Installed capacity for bioethanol production (as
of June, 2008)
192,349 kL/year
Installed capacity for biodiesel production (as of
December, 2008)
2,529,110 kL/year
Energy self-sufficient village (ESSV) (as of early
2009)
150 villages
Biofuel power generator by state-owned
electricity company (PLN) installed capacity (as
of June, 2008)
96 MW
Biofuel utilization in industry (as of November,
2008)
5%
Biofuel utilization in electric sector by PLN
(PLTGU Gresik 19 MW started in 31 January
2009)
8 kL/day
Projection:
Bioethanol development: Projection up to 2010
~4,000,000 kL/year
Biodiesel production: Projection up to 2010
~5,000,000 kL/year
Biofuel power generator by PLN in 2009–2010
220,000 kL biodiesel in all biofuel power
generators allover Indonesia
Source: Legowo 2009
M. Elder et al.
Zone (SBZ) program by encouraging each region to develop its biofuel potential
were expected to contribute to national energy security.
The progress of the implementation of the biofuel development plan in Indonesia
as of early 2009 is illustrated in Table 8.2 above.
8.2.2 Overview of Main Biofuel Market Conditions in
Indonesia
8.2.2.1 Biodiesel from Palm Oil and Jatropha
For biodiesel, palm oil is the main feedstock, based on Indonesia’s well-established
palm oil industry, with a total plantation area estimated to be over 6 million hectares. Indonesia surpassed Malaysia to become the world’s largest palm oil producer
in 2008, producing 18 billion liters (OECD-FAO 2008).
The global price of palm oil soared from mid-2006 to the middle of 2008, partly
due to its popularity as a major biodiesel feedstock. As a result, biofuel production
from palm oil became unprofitable. Initial estimates that palm oil-based biodiesel
would be competitive to conventional oil at $400 per metric ton, or about $54 per
barrel, proved to be wrong. When oil prices peaked above $140 per barrel, the price
of palm oil rose even higher making biofuels more expensive to produce. Pertamina
suffered losses from its biofuel blends because the government required it to sell
Table 8.2 Progress of biofuel development in Indonesia
As of early 2009
Installed capacity for bioethanol production (as
of June, 2008)
192,349 kL/year
Installed capacity for biodiesel production (as of
December, 2008)
2,529,110 kL/year
Energy self-sufficient village (ESSV) (as of early
2009)
150 villages
Biofuel power generator by state-owned
electricity company (PLN) installed capacity (as
of June, 2008)
96 MW
Biofuel utilization in industry (as of November,
2008)
5%
Biofuel utilization in electric sector by PLN
(PLTGU Gresik 19 MW started in 31 January
2009)
8 kL/day
Projection:
Bioethanol development: Projection up to 2010
~4,000,000 kL/year
Biodiesel production: Projection up to 2010
~5,000,000 kL/year
Biofuel power generator by PLN in 2009–2010
220,000 kL biodiesel in all biofuel power
generators allover Indonesia
Source: Legowo 2009
M. Elder et al.