APEC Workshop on Establishment of the Guidelines for the Development of Biodiesel Standards in the APEC Region16-18 July 2008, Taipei

Andi NoviantoAssistant to Deputy Minister - Coordinating Ministry for Economic Affairs/Chairman, Alternative Energy Technical Team

BIOFUEL DEVELOPMENT: INDONESIA

Energy Mix Situation

Oil52.5%

Natural Gas19.0%

Coal21.5%

Hydro Power3.7%

Geothermal3.0% Other Renewable

Energy0.2%

BioetanolBiooilBiodiesel

Target Energy Mix 2025

Natural Gas

30%

Geothermal

5%Other Renewable Energy

5%

Biofuel

5%

Coal Liquefaction

2%

Coal

33%

Oil

20%

- Population Increase: - Increase in Economic

Growth:- Increase in Living Standard

- Population Increase: - Increase in Economic

Growth:- Increase in Living Standard

- Energy Demand Increase - Electricity Demand Increase

- Energy Demand Increase - Electricity Demand Increase

Environmental Issue:- Global Warming- Air Pollution- Acid Rain- Health

Environmental Issue:- Global Warming- Air Pollution- Acid Rain- Health

TYPE OF ENERGY SELECTION

Fosil Energy

OIL COAL Gas

NEW AND RENEWABLE ENERGY

Hiydro,Microhydro

Solar, wind, biofuel,

geothermal, hidrogen, FC

Nuclear

Environment INFRASTRUCTUR ENERGY RESOURCES SOCIAL-CULTURE GEOPOLITIC ECONOMY

BASED ON NATURAL RESOURCES BASED ON TECHNOLOGY

Energy Planning to 2025Energy Planning to 2025

BPPT, 2007

Vision and Mission of Biofuel

Vision:Poverty alleviation and employment creation through development of biofuel as alternative energy to increase people’s welfare.

Mission:Creating employment opportunities (feedstock supply, industry, infrastructure, supporting activities).Increasing rural community independency (Energy Self-sufficiency Village).Increasing the role of private sector involvement.Regulating biofuel business, feedstock supply, and utilization.Developing business climate through incentives.

Current ConditionsHigh potency for biofuel feed stock supply and land availability that suitable for biofuelplantation.

Proven biofuel technology by local potency.

Biofuel industry allows community participation, including farmers.

Opportunity in exporting biofuel products.

Local government has opportunity in increasing its economic development.

7

Biofuel Development Strategy

Energy

LONG RUN

Fast Track

Each Region Developing its

Biofuel Potential

SPECIAL BIOFUEL ZONE

Create Job

Poverty Alleviation

SHORT RUNEnergy Self

Sufficient Village

National Team Biofuel, 2007

Characteristics of Biofuel Sources

The sources will not be vanished in a very long period of time.

The physical and economical aspects according to the plantation area and the climate.

Responsive toward the demand growth.

Environmentally friendly.

Impact on food supplies.

AARD-MOA, 2007

Main Sources

Oil Palm

Area: 5.6 106 HaCPO yield: 14 106 tonsLocal consumption: 3.5 106 tonsExport: 8-10 106 tonsThe preparation of palm oil for biofuelproduction is relatively ready. However, the needs for cooking oil in the country and for export should be consideredFrom the 5,6 million palm oil plantation 53,7% is run by private companies, 34,2% owned by the local farmers, and state owned enterprises about 12,1%

AARD-MOA, 2007

Jatropha Curcas

Jatropha is another option in creating biofuelbased on some considerations, which are the limited usage of the plant other than the benefit as a biofuel.

The preparation of Crude Jatropha Oil is limited by the availability of high yielding clones. In 2006 three Improved Population Seeds have been released.

It is estimated that:

14.2 mill ha very suitable

5.5 mill ha suitable

29.7 mill ha: marginally suitable for Jatrophaplanting

AARD-MOA, 2007

IP-1(2006) : Esti. yield : year 1 ~ 0.5 - 0.6 ton/ha

year 5 ~ 4.5 – 5.0 ton/ha

IP-2(2007) :Esti. yield : year 1 ~ 0.9 – 1.0 ton/ha

year 5 ~ 7- 8 ton/ha

IP1- P

IP1- M

IP1- A AARD-MOA, 2007

Yield Improvement

Coconut

Coconut is predicted to attract community’s attention especially to provide alternative energy to replace diesel fuel. Area: 3.8 106 ha, 97% are small-holder, scattered throughout the country including small islands and remote areasAbout 20-30% coconut plantation in Indonesia should be renewed because the coconut trees are already old. However, the potential is very promising. The obstacle to develop coconut so far is related to plants distribution and low sosialization of the benefits from it.

AARD-MOA, 2007

Cassava

The varieties of cassava crop for bioethanolproduction are available.Area: 1.2 106 ha.The yield of three recommended varieties of cassava 30 – 40 t/ha, while national average of productivity 15,9 t/ha. The production of cassava nationally is about 20 million tons of fresh casssava.

AARD-MOA, 2007

Sugarcane

The production crop of sugarcane for bioethanol is available. Area 382 103 ha.Production 31 103 ton.The problem to develop bioethanol from sugarcane are limited areas, quite high investment cost, and compete with sugar production.

AARD-MOA, 2007

Biofuel UtilizationAVAILABILTY UTILIZATION TARGET UPTO 2010 USERS

FEEDSTOCK

B-10

E-10

TRANSPORTATION

POWER PLANT

HOUSEHOLDBUSINESS/ COMPANY

O-10BIOFUELREFINERY

TRANSPORTATION

O-100

POWER PLANTO-50

Roadmap Biofuel Development

Year 2005-2010 2011-2015 2016-2025

NATIONAL STANDARD OF BIOFUEL

Biofuel Utilization2% of energy mix

5.29 mil. kL

Biofuel Utilization3% of energy mix

9.84 mil kL

Biofuel Utilization5% energy mix22.26 mil kL

Regulation Policy Initial Activities Improving Climate Invest. Dissemination

18

Facilities and Incentives

Government Regulation No. 8/2007 concerning Government Investment

Minister of Finance Decree No. 117/PMK.06/2006 concerning Credit for Bioenergy Development and Revitalizationof Plantation (KPEN-RP)

Minister of Finance Decree No. 79/PMK.05/2007 concerning Credit for Food and Energy Security (KKPE).

AARD-MOA, 2007

Concept of Biofuel Zone

R&D

AGRIC AGRIC

INDUSTRY PLN EXPORT PERTAMINA TRANSPORT

LAND FOR

BIOFUEL

BIOFUEL INDUSTRY

20

Potensi Lahan Pengembangan TebuRendahSedangTinggiSangat Tinggi

Bioethanol Production 2007: ± 160.000 kl/year

SUGAR GROUP Lampung

70.000 kl/year(Molases, Integrated Industry)

Molindo RayaMalang, East Java

50.000 kl/year(molases ex-PTPN)

BPPT Lampung2.500 kl/year

(Cassava)

BLUE & MONONUTU Minsel

2 x 73 kl/year(Sugarpalm)

PANCA Cicurug73 kl/year

(Cassava & Molases)

TRIDAYA Cilegon1.095 kl/year

(Molases)

BLUE Balikpapan73 kl/year

(Molases, Sorghum)

BEKONANG, Solo

140 x 37 kl/year(Molases)

Research Project

Small and Medium Scale

Enterprises

Commercial Scale

National Team Biofuel, 2007

21

Biodiesel Production 2007: ± 2 million KL/th

WILMAR GROUP Dumai

1.100.000 kl/year(CPO)

ETERINDO Gresik &

Tangerang267.000 kl/year

(CPO)

PTPN 4 & GANESHA

ENERGI Medan4.400 kl/year

(CPO)

SUMIASIH Bekasi & Lampung111.000

kl/year(CPO)

BPPT Serpong

330 kl/year(CPO)

EAI Jakarta 550 kl/year

(CPO)

RAP Bintaro1.830

kl/year(CPO)

DHARMEX111.000 kl/yr

(CPO)

INDO BIOFUELS ENERGY

Merak111.000 kl/year(CPO)

PLATINUM Serang

22.000 kl/year (CPO)

MUSIM MAS Pekanbaru

300.000 kl/year(CPO)

National Team Biofuel

R&D in Biodiesel Plant in Riau (BPPT)

BPPT , 2007

Investment OpportunityLand availability:a number of companies have obtained reserved approval from Ministry of Forestry about 4 million ha, but they do not continue to release the area. unutilized plantation (grade V) about 302 thousands ha. inactive plantation about 2 million ha.Technological availability (i.e. seed development).Government support (regulations).Maximum area for Jatropha (50,000 ha), Coconut (25,000), Palm Oil (100,000 ha), Sugarcane (150,000).Foreign company should cooperate with Indonesian company.

Biodiesel Standard and Specification

No. Quality Parameter Unit Value(s)1 Acid value mg KOH/g Max. 0.8

2 Phosphorous content mg/kg Max. 10

3 Water & sediment content %-v/v Max. 0.05

4 Kinematic viscosity at 40 oC mm2/s 2.3-6.0

5 Sulfated ash %-m/m Max. 0.02

6 Iodine value %-m/m Max. 115

7 Flash point (close cup) oC Min. 100

8 Carbon residue %-m/m Max. 0.3

9 Density at 40 oC kg/m3 850 – 890

10 Cetane number - Min. 51

11 Sulfur content mg/kg Max. 100

24Decree, Director General of Oil and Gas, 2006

Conclusion

Government of Indonesia is supporting biofueldevelopment program, as one alternative energy, with regulations, policies, and disseminations.There are a lot of potency for biofuel development using several commodities as feedstock in Indonesia.Feedstock from palm is ready to be used for biodieseldomestically, but it competes with cooking oil. While, Jatropha is still being developed, but seed technology is improving, and non-edible food as well.Land availability are abundant for biofueldevelopment, without converting natural forest areas.

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