Indonesia to impose 2.5 percent biofuel mandate in October

Indonesia will establish a 2.5 percent biofuel mandate commencing in October, according to the head of Indonesia’s  national biofuel development team. Al Hilal Hamdi told lawmakers that the mandate would apply to the islands of Java and Sumatra, and expand to other islands at a later date.

Indonesia background

In East Timor, opposition parties are protesting over a decision by the government to give a 50-year lease on 247,000 acres to Indonesian company GTLeste Biotech for a sugar plantation and ethanol mill. The opposition dismisses government claims that the land involved was unproductive, noting that it can support sugarcane cultivation, and says that the land involved is more than 16 percent of the total arable land in the country. In turn, the government said that no final agreements had been signed, and that the project would bring economic development to the country.

The Indonesian Palm Oil Association said that oil palm produces will no longer clear land to plant oil palm, and will use only existing lands or idle lands for palm cultivation. Rainforest clearing had raised an international outcry over destruction of carbon sinks. Association leadership said that 7 million hectares of unused and was available for oil palm cultivation.

The chairman of the Indonesia Palm Board said earlier this month that the Indonesian government is considering a B3 biodiesel mandate to reduce the use of petroleum. IOPB chairman Franky O. Widjaja did not say when the mandate would take effect. The state oil firm, Pertamina, has been offering a biodiesel blend since 2006 but has reduced the blend from B5 to B1 on account of rising palm oil prices.

The Indonesian government said earlier this year that it would return to a B5 standard by 2010, based on projected yields from new palm and jatropha cultivation. Indonesia will overtake Malaysia in 2007 as the largest producer of palm oil and expects to produce 20 million tonnes by 2010, up from 17 million tonnes in 2007.

Earlier this year, Greenpeace released its “Cooking the Climate” report which concluded that forest clearance in Indonesia for palm plantations has made the country the third largest producer of greenhouse gas emissions, behind the United States and China.The study found that Indonesia is losing 2 percent of its tropical forest each year to deforestation, and that the resultant emissions more than offset the gain from switching from fossil fuels to biofuels. Indonesia has six million hectares of palm under cultivation and plans to expand this to 10 million hectares by 2015.

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