The New Nation - Internet Edition

The Indonesian government, according to a recent media report from Jakarta, will impose 'a new regulation' next month (October) demanding manufacturing companies use at least 2.5 per cent biofuel in their fuel consumption and it is rather mandatory with a view to reducing dependence on fossil fuel. The regulation is possibly going to be issued this month so that it can come into effect next month. The regulation will also give a degree of certainty for biofuel producers through the 'creation of demands' for their products such as biodiesel and bioethanol.

The measure is being taken in a bid to achieve self-reliance step by step following the recent wider global impact of the soaring prices of both fuel and food. To prepare for implementation, the government would cooperate with Indonesia's fuel producer-retailers such as Pertamina, Shell and Petronas to work on securing the supply of biofuel.

These companies would blend the 2.5 per cent biodiesel fuel with diesel fuel before selling to industries. The main purpose of the regulation is not to provide a cheaper fuel source, but to diversify sources of energy and to support the biofuel industry.

The minimum biofuel content requirement for industries would continue to increase. As of June 2008, Indonesia's annual bioethanol production capacity reached 192,349 kilolitres a year and this figure is expected to increase to 4 million kilolitres in 2010. Based on production capacity, the country's annual biofuel production is currently at 2 million kilolitres and is expected to grow to 5 million kilolitres in 2010. As of March this year, the investment commitment for the bioenergy development reached US$ 3.44 billion.

Indonesia, not far away from Bangladesh, has produced two types of biofuels - one from cassava, sugarcane, sweet sorghum and the other from castor and crude palm oil.