Government Reduces Palm Oil Bio-fuel
Tuesday, 24 July, 2007 | 00:35 WIB

Tempo Interactive, Jakarta: The government will reduce the development of bio-fuel from palm oil. The reduction was due to the crude palm oil (CPO) price hike. “We will try that bio-fuel development is not only focused on palm oil,” said Energy and Mineral Resources Minister, Purnomo Yusgiantoro, yesterday (23/7).

The reduction of using palm oil for bio-fuel, he said, will not influence bio-fuel development. His reason was fuel development does not only depend on palm oil. Bio-fuel development can also use other kinds of plants.

According to him, bio-fuel development from palm oil will be transferred from subsidized fuel oil (“premium” and automotive diesel fuel) to non-subsidized fuel (“pertamax” and “pertamax plus”). The transfer was carried out due to the high cost the government bears.

Purnomo said mixing bio-fuel with non-subsidized fuel oil will be more efficient. “It will later be transferred to non-subsidized fuel oil,” he said yesterday.

So far bio-fuel content of the “premium” type and automotive diesel oil is only five percent. The cost for procuring bio-fuel is borne by PT Pertamina.

Head of the National Team for Bio-fuel Development, Alhilal Hamdi, said that the palm oil issue is not the main issue. According to Hamdi, the total amount of palm oil supply is five times higher than the need of palm oil for cooking oil.

Alhilal said that the domestic palm oil need is 3.6 million tons per year. In the meantime, CPO production in 2007 reached 17 million tons. Even Indonesia's CPO production capacity this year is higher compared to Malaysia. As much as 44 percent of the world's CPO production is derived from Indonesia.

Head of the Agency of Technology Assessment and Application (BPPT), Said D. Jennie, said he was studying other base commodities of bio-fuel from other plants.

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