Indonesia to Hike Biodiesel Output to Meet New Mandate

Indonesian biodiesel producers plan to raise output capacity by nearly a fifth to eight million kiloliters next year to meet higher mandates, a senior industry official said.
Indonesia has been pushing for greater local use of biofuel, made from vegetable oils, to cut its fossil fuel import bill and create more demand for palm oil, of which the nation is the world's largest grower and exporter, as well as Malaysia.
`Our capacity now is 6.8 million kiloliters for biofuel; next year we expect it to be eight million kiloliters,” Paulus Tjakrawan, chairman of Indonesia’s Biofuel Producers Association, told an industry conference on the resort island of Bali on Thursday (Nov 26).
`That will be more than enough to support B15 and B20 next year,” he said, referring to the country's biodiesel program requiring a minimum 15 percent bio content in diesel fuel, set to rise to 20 percent in 2016.
Malaysian benchmark palm oil prices stand to gain if Indonesia absorbs more of its crude palm oil to blend into biodiesel as the country moves towards B20, leaving less tropical oil available for export.
The Indonesian Automotive Association is working to ensure vehicles can run on 20 percent biodiesel.
`Based on our road test, we are quite positive we can implement B20,” said Abdul Rochim, a board member of the Automotive Industry Association.
`We cannot avoid (implementing B20), we have to follow, but we need an increase in specification,” so it does not damage engines, he added.
Paulus said producers were working to raise quality standards.
Higher biodiesel consumption is seen as important for Indonesia to meet its commitments to cut greenhouse gas emissions. Last year, biodiesel use contributed to 11.8 percent of the country’s energy and transportation sector emission savings, Paulus said earlier this week.
Indonesia is the world's fifth-biggest greenhouse gas emitter when deforestation is included in the equation. The country faces international pressure to tackle carbon-rich peatland and forest destruction that causes choking smoke haze to spread across much of Southeast Asia each year.
Ahead of a U.N. climate conference in Paris next month, the government has also pledged to cap its rising greenhouse gas emissions by 2030. [hd]
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