Inaugurating Biodiesel Factory, Jokowi Wants to Immediately Leave the Use of Fossil Fuels

President Joko Widodo emphasized Indonesia’s commitment to immediately abandon dependence on fossil energy by using new and renewable energy (EBT), one of which is encouraging biodiesel production.

“I want to emphasize that we must uphold our commitment to leave fossil energy and switch to new and renewable energy (EBT). Therefore, for this B30 production, we must continue to increase this biodiesel production and in 2021 we are targeted to be able to produce and distribute 9.2 million kiloliters and I ask that next year it can also increase even higher,” said Jokowi at the inauguration of the biodiesel factory owned by PT Jhonlin Agro. Raya in Tanah Bumbu Regency, South Kalimantan, Thursday (21/10).

Jokowi explained that Indonesia has a very large CPO production potential, reaching 52 million tons per year. Therefore, he said, the great potential should not be stopped by just being an exporter of raw CPO. He emphasized that downstreaming and industrialization must be carried out in the country. He also appreciated PT Johnlin Group for being willing to build a biodiesel factory to produce CPO into B30, which according to him would provide considerable added value and create more derivative products from CPO.

“We have stopped nickel, we cannot export (raw), there is a smelter, there is a factory to process it into semi-finished goods and so what we hope will also become goods that have high added value, namely lithium batteries for electric cars. Copper I am also very happy that just a week ago we inaugurated the largest smelter in the world which processes copper later into finished or semi-finished goods. Today, CPO is turned into biodiesel. We will continuously encourage this domestic company to process everything from raw materials into semi-finished goods or finished goods,” he said.

The PT Jhonlin Group biodiesel plant is expected to create many jobs, maintain CPO price stabilization, and contribute to reducing greenhouse gas emissions.  (Photo: Agus Suparto/Twitter @jokowi)

The PT Jhonlin Group biodiesel plant is expected to create many jobs, maintain CPO price stabilization, and contribute to reducing greenhouse gas emissions. (Photo: Agus Suparto/Twitter @jokowi)

Jokowi assessed that the biodiesel industry would be very strategic in the future. According to him, this will increase national energy security, and reduce the trade balance deficit due to reduced diesel imports. Jokowi noted that with this increase in biodiesel production, Indonesia was able to save foreign exchange of IDR 38 trillion in 2020, and it is estimated that this year it will be able to save foreign exchange of IDR 56 trillion. In addition, the increase in biodiesel production will also be able to maintain the stabilization of CPO prices.

“Don’t let us have CPO, but what determines the price is what is in the market, no. In what way should we be able to control this? If the export price is good, please export it, if not, use it yourself. We have those alternatives and options. Ensure the stability of demand and demand for oil palm farmers and will have an effect on the welfare of the wider community. Then thirdly, we also want to develop biodiesel into new and renewable energy which will improve the quality of the environment through the contribution of reducing greenhouse gas emissions,” said Jokowi.

Impact of Environmental Damage

Meanwhile, Greenpeace Indonesia Senior Forest Campaigner Arkian Suryadarma said the Indonesian government’s decision to transition the use of EBT from fossil energy by increasing biodiesel production was a wrong solution. Arkian explained that the increase in biodiesel production, which is a derivative product from palm oil, will further expand the environmental damage. He gave an example to produce B30 alone, it is certain to add 3 million hectares of new oil palm plantation land, even for B50 it is estimated that there will be an additional 9 million hectares of new land.

“So if for example B50 there will be an additional 9 million hectares of new land for palm oil itself. So, the potential is huge if it is not regulated, for example, and we also see from the side of fossil reduction itself, how good is it if we compare fossils, for example. Moreover, if we plant or clear land on a large scale using forest fires or planting on peat, the emissions are greater than coal,” he told Mouab.

He also saw that although the land for oil palm plantations in the country is quite large, the results are not productive. The average production is only 3 million tons per year. This figure is still lower than Malaysia, where the area of ​​oil palm plantations is half smaller than Indonesia. Therefore, he questioned the government’s policy if it still wants to open new oil palm land.

With the impact of such extensive environmental damage due to the clearing of oil palm land, Arkian advised the government to use other renewable energy potentials owned by Indonesia, namely solar and wind power. Moreover, biodiesel, he said, still uses coal for a mixture of B30 and B50.

supply and Demand

On the other hand, CORE Indonesia Economic Observer Muh Faisal said the increase in biodiesel production would indeed be able to reduce Indonesia’s dependence on imported fuel oil (BBM). In addition, this biodiesel will also be able to absorb surplus CPO supplies in the country.

However, Faisal underlined that the government must ensure the downstream side to support the increase in biodiesel production, one of which is to provide a market that will absorb the biodiesel.

“For example, this biodiesel was purchased by Pertamina. Next is the problem of using biodiesel by Pertamina, so the market is the vehicle. So how then can the automotive industry in Indonesia absorb or produce automotive products that use biodiesel as fuel. So one obstacle that prevents the automotive industry from designing or producing cars or motorcycles that use biodiesel means that it must be overcome,” he told Mouab.

He said the government must have a consistent policy to support this, so that in the future investors will not hesitate to invest by building an automotive factory fueled by biodiesel. Especially at this time, the majority of public vehicles in Indonesia still use gasoline.

“The current (biodiesel) factory he certainly expects to exist demand. And the government must ensure that the policy to use biodiesel as a new alternative to fuel for vehicles will continue to be strengthened. That’s what makes investors (interested) because there is an incentive system provided by the government,” he concluded. [gi/ab]

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