Bio-diesel may reduce oil bills by 10% up to 2010

The Jakarta Post, Jakarta

The government is targeting a 10 percent reduction in the country's consumption of oil-based fuels by 2010 from the current level of 41 million kiloliters (kl) by promoting the production and use of bio-diesel.

Energy and Mineral Resources Minister Purnomo Yusgiantoro said Monday that the government was considering the development of 11 bio-diesel plants in various parts of the country, including Kudus in Central Java and East Nusa Tenggara, in order to achieve the target.

Purnomo told a parliamentary hearing here that the plants, if they get the go-ahead, would likely come onstream in 2007.

"They will have a total production capacity of 26,000 tons per annum, equal to almost 29 million liters, or about 45 percent of annual consumption in Jakarta," he said.

Purnomo estimated that the proposed plants would require 6.1 million hectares of oil palm, sugarcane and castor oil plantations to keep them supplied with raw materials.

He said the development of the bio-diesel industry could ultimately provide 3.5 million jobs.

The minister said that the government would also encourage the private sector to become involved in bio-diesel production by simplifying the licensing procedures for the establishment of production plants and the distribution of bio-diesel products.

"At present, one company has already obtained a permit and five others are in the process of seeking permits to produce bio-diesel," said Purnomo.

According to an interministerial team, the country's bio-diesel production should reach 187 million liters by the end of 2007, 377 million liters by 2008, 1.2 billion liters by 2009 and 1.3 billion liters by 2010.

State-owned oil and gas firm Pertamina is focusing on blending three different types of bio-diesel, known as B5, B10 and B15. The company already sells the B5 variety, which is a blend of 5 percent bio-diesel and 95 percent ordinary diesel, and is priced at Rp 4,300 per liter. This blend has been on sale since May 20 at four gas stations in Jakarta. (07)
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