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Biofuel Demand Outstrips Supply
calendar12-08-2011 | linkJakarta Globe | Share This Post:

12/08/2011 (Jakarta Globe) - Ismail Segeir would like to do his bit for the environment, including reducing his carbon footprint.

For the 19-year-old university student, that means using biofuels rather than regular fuels, but even that simple gesture is hard to carry out here.

“It’s not that I don’t want to use biofuel,” he tells the Jakarta Globe. “I don’t mind using biofuel, and it costs the same as regular fuel, but it seems you can only find it at a few gas stations.”

The same goes for Nyoman Iswarayoga, the director of climate and energy issues at conservation group WWF Indonesia. He has to go out of his way to find gas stations that sell Bio Premium or Bio Pertamax, the subsidized and nonsubsidized brands of ethanol-enriched gasoline sold by state-owned oil company Pertamina.

“I know of only one gas station that provides Bio Premium, in the Kuningan area [of South Jakarta],” he says.

“However, I don’t exactly limit myself to using Bio Premium or Premium, because they both cost the same. If I can’t get Bio Premium, I just use regular Premium.”

Indonesia has long suffered a dearth of biofuels despite possessing immense biomass resources, says Soni Solistia Wirawan, head of the Energy Technology Center at the government’s Agency for the Assessment and Application of Technology (BPPT).

“Biofuels are taking off and developing in the country, but at a very slow pace,” he says.

This will remain the case “as long as the government keeps subsidizing fossil fuels,” he adds.

In the 1980s, the BPPT developed a biofuel that it called gasohol, and began producing eight tons of it a day for use in trials in vehicles in Lampung.

However, the idea of replacing a given amount of regular fossil fuel with additives synthesized from plants — sugar- or corn-based ethanol in the case of biogasoline, and palm oil- or jatropha-based alkyl esters in the case of biodiesel — was only seriously considered in 2005, when world oil prices hit $70 a barrel, severely straining the government’s fuel subsidy.

The government came out with several energy policies, allowing blends of up to 10 percent biofuel in regular fuels, setting up a national committee to manage biofuel policy and integrating biofuel use into the national road map for energy management.

“However the introduction of all of those policies still didn’t boost biofuel use,” Soni says.

He adds that today, the production and use of bioethanol remains highly underdeveloped, while biodiesel, for which development and consumption are slightly more advanced, remains largely underutilized.

“From the approximately four million kiloliters of biodiesel that our refineries have produced annually since 2009, only 350,000 kiloliters are purchased for use [by Pertamina],” he says.

Mochamad Harun, a spokesman for Pertamina, blames a lack of supply for the company’s inability to make biofuels available at more gas stations nationwide.

“It’s not that we don’t want to sell it, but not many suppliers are willing to it to sell us,” he says. “We’re just the end-users, we don’t plant oil palms.”

The lack of supply has forced Pertamina to lower the grade of the biofuels that it offers to motorists. Its biodiesel and biogasoline products are classified as B2.5 and E2.5, respectively. That means they only contain 2.5 percent bio-additives, with the remaining 97.5 percent consisting of regular fuel.

“We used to be able to mix about 5 percent to 10 percent [biofuel], but because of the short supply, we’re going as low as just 2 percent,” Harun says.

He adds that one of the factors for the supply shortage is the fact that the ingredients for biofuels are also key food crops, including palm oil, of which Indonesia is the world’s biggest producer.

“Most producers consider it more beneficial and lucrative to sell palm oil for food production instead of for energy purposes,” he says.

He also says that the alternative energy movement in the country will have a hard time trying to get more users to shift to biofuels as long as the government maintains subsidies on regular fuels.

Iswarayoga, from WWF Indonesia, says both the producers and Pertamina should take a long-term view of the country’s energy security.

“Our oil will run out in 18 to 20 years, so what will we use then to run our cars?” he says. “This is why we need alternative energy. It’s not just about reducing emissions, but also about reducing our dependence on fossil fuels.”

Soni says that claims that biofuels can reduce emissions are doubtful. The palm oil, corn and sugarcane used to produce biofuels come from plantations that require large amounts of fossil fuels to grow, harvest, process and transport crops.

“However, there are also studies that show that if there is greater environmental awareness from the beginning of the development process, then it could turn out to be beneficial,” he says.