Agriculture ministry prepares biofuel industry to support sustainable B50 program

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The Ministry of Agriculture has prepared a biofuel industry to increase the domestic supply of biodiesel, as an initiative to increase the availability of biofuel to 50 percent from the total consumption of solar fuel, which aligns with President-elect Prabowo Subianto's program in mixing biodiesel and solar.

"Now, the companies are ready. We are preparing the companies from now as according to the instructions from Mr President and President-elect to achieve B50," Minister of Agriculture, Andi Amran Sulaiman, said on July 19, 2024.

"The preparation has begun from now, involving companies that will play an important role to achieve the B50 target," Amran said.

However, the location of the industrial area that is being prepared to support the program has yet to be explained by the ministry.

Amran said the B50 program is aimed at reducing the dependencies on solar fuel import and to replace it with biofuel from crude palm oil (CPO).

The domestic biofuel production in Indonesia reached 46 million tons per year, and about 26 million tons are exported to the global market. However, Indonesia still imports about 5.3 million tons of solar each year.

"We produce 46 million tons of biofuel right now and export 26 million tons. If we convert it again, because we import 5.3 million tons of solar, what does it mean? Then if the world CPO price increases, in the end the Indonesian palm oil farmers will enjoy it," Amran said.

Amran expressed hope that the implementation of the B50 program will not only decrease the dependencies on solar imports, but also increase the CPO price in the global market.

He considered this as a good step for the local palm oil farmers, citing that Indonesia is one of the biggest producers in CPO in the world with a market share reaching 58-60 percent.

The agriculture ministry also highlights the potential for Indonesia to be the world's largest main provider of CPO globally. According to the ministry, this would not create significant problems, as Indonesia's supply of CPO is secure.

However, a number of observers evaluate the sustainability of the biodiesel program as a biofuel proposed by the government needs problem handling in the palm oil upstream sector.

Rapolo Hutabarat, Head of Sustainability Division at the Biofuel Producer Association of Indonesia (APROBI) expresses the problem handling in the palm oil upstream sector is the key to a sustainable biodiesel program because it concerns the availability of raw materials.

"This problem needs to be solved, especially from the upstream. We know that there is a lot of work that needs to be done upstream, because this determines the availability of the materials," he said.

Rapolo said further that the continuation of blending biofuel programs such as B40 and the probability of further improvements to B45 and B50 is very important as the success of the programs also depends on the availability of raw materials in the upstream sector.

APROBI also hopes the government would solve the problem in the upstream sector in order for Indonesia to achieve its big dream in the palm oil sector, including the CPO production target amounting to 100 million tons in 2045.

Rino Afrino, General Secretary at the Central Executive Board of the Indonesian Oil Palm Farmers Association (APKASINDO) adds the need to increase productivity through steps in the upstream sector.

Rino explains there are several challenges in increasing the oil palm productivity, such as land legality which reached 3.4 million hectares of oil palm convicted in a forest area.

Furthermore, the realization of people's oil palm rejuvenation program (PSR) had only reached below 10 percent from the target or about 390,000 hectares from 2.4 million hectares that was set.

Source: Indonesia Business Post

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