93
8.2.3 Socioeconomic Impacts
Biofuel production in Indonesia, regardless of feedstocks used, is not yet economically viable under current conditions and requires heavy subsidies. Economic sustainability is essential for long-term biofuel development plans like Indonesia’s,
especially in light of the country’s increasing fiscal constraints. In order to justify
support from the government budget, the social benefits of biofuels need to be demonstrated. In this context, the government also considered how to use biofuels to
promote rural development.
The government launched the Energy Self-sufficient Village (ESSV) program in
2006 targeting 1000 villages in remote areas to be self-sufficient in their energy
needs by utilizing their own local renewable energy resources. Of the 1000 villages,
500 will produce their own supply of biofuels from Jatropha, cassava, or sweet
sorghum to run basic equipment for lighting and farm activities and to replace the
use of kerosene for cooking purposes. The other 500 villages will harness their
water resources to develop mini-hydro or pico hydropower and install solar photovoltaics (PV). As of 2010 the biofuel-based project was implemented in almost 150
villages.
For this study, three pilot ESSV projects were visited and surveyed – Karangtengah
village in Wonogiri utilizing cassava for bio-kerosene production, Purwantono village in Wonogiri utilizing sweet sorghum for bio-kerosene production, and Way
Isem village in Lampung utilizing Jatropha for biodiesel production. The farmers in
Karangtengah have sufficient experience in planting cassava which they sell for
processing as food or animal feed. The village allocated some common land to
increase cassava plantation to be used for bio-kerosene production. At the time of
the survey, the mini-processing plant had been constructed but was still undergoing
intermittent testing to achieve consistency in the desired blend (~70% ethanol). The
potential to produce bio-kerosene out of cassava was welcomed eagerly by farmers,
but the project remained a community experiment, and how it would be managed
and sustained remained to be seen. The case in Purwantono was more complicated
because the farmers had no prior knowledge in planting sweet sorghum. The miniprocessing plant had also been built, but even the necessary testing was difficult to
conduct because of a lack of feedstock. In Way Isem, farmers planted Jatropha as
hedges and in idle plots. Initially there was high demand for seeds and seedlings, so
many farmers planted Jatropha. However, farmers did not want to become full-time
Jatropha farmers because they earned more from planting other crops. From the
limited operations in Way Isem, and also because of a lack of Jatropha seeds, farmers valued more the Jatropha waste that could be used to produce biogas for cooking than the straight Jatropha oil.
Overall, the success rate of ESSV was lower than expected despite the government’s assistance providing the necessary processing equipment. The feedstock
supply was too unstable to operate continuously. Coordination among agencies
8 Socioeconomic Impacts of Biofuels in East Asia
8.2.3 Socioeconomic Impacts
Biofuel production in Indonesia, regardless of feedstocks used, is not yet economically viable under current conditions and requires heavy subsidies. Economic sustainability is essential for long-term biofuel development plans like Indonesia’s,
especially in light of the country’s increasing fiscal constraints. In order to justify
support from the government budget, the social benefits of biofuels need to be demonstrated. In this context, the government also considered how to use biofuels to
promote rural development.
The government launched the Energy Self-sufficient Village (ESSV) program in
2006 targeting 1000 villages in remote areas to be self-sufficient in their energy
needs by utilizing their own local renewable energy resources. Of the 1000 villages,
500 will produce their own supply of biofuels from Jatropha, cassava, or sweet
sorghum to run basic equipment for lighting and farm activities and to replace the
use of kerosene for cooking purposes. The other 500 villages will harness their
water resources to develop mini-hydro or pico hydropower and install solar photovoltaics (PV). As of 2010 the biofuel-based project was implemented in almost 150
villages.
For this study, three pilot ESSV projects were visited and surveyed – Karangtengah
village in Wonogiri utilizing cassava for bio-kerosene production, Purwantono village in Wonogiri utilizing sweet sorghum for bio-kerosene production, and Way
Isem village in Lampung utilizing Jatropha for biodiesel production. The farmers in
Karangtengah have sufficient experience in planting cassava which they sell for
processing as food or animal feed. The village allocated some common land to
increase cassava plantation to be used for bio-kerosene production. At the time of
the survey, the mini-processing plant had been constructed but was still undergoing
intermittent testing to achieve consistency in the desired blend (~70% ethanol). The
potential to produce bio-kerosene out of cassava was welcomed eagerly by farmers,
but the project remained a community experiment, and how it would be managed
and sustained remained to be seen. The case in Purwantono was more complicated
because the farmers had no prior knowledge in planting sweet sorghum. The miniprocessing plant had also been built, but even the necessary testing was difficult to
conduct because of a lack of feedstock. In Way Isem, farmers planted Jatropha as
hedges and in idle plots. Initially there was high demand for seeds and seedlings, so
many farmers planted Jatropha. However, farmers did not want to become full-time
Jatropha farmers because they earned more from planting other crops. From the
limited operations in Way Isem, and also because of a lack of Jatropha seeds, farmers valued more the Jatropha waste that could be used to produce biogas for cooking than the straight Jatropha oil.
Overall, the success rate of ESSV was lower than expected despite the government’s assistance providing the necessary processing equipment. The feedstock
supply was too unstable to operate continuously. Coordination among agencies
8 Socioeconomic Impacts of Biofuels in East Asia