Jakarta – Researchers at the National Research and Innovation Agency (BRIN) say Indonesia still faces significant challenges in developing biofuels as an alternative fuel.
BRIN Senior Researcher Arie Rachmadi revealed that crude palm oil (CPO) is one of the main raw materials used in biofuels in Indonesia. The high price of raw materials and limited supply make biofuels unable to compete with fossil fuels. According to him, strong government support is needed to overcome this problem so that biofuel production can reach a more competitive scale and price.
“Our CPO production is large, around 50 million tons per year from 17 million hectares of land. However, despite the abundance of raw materials, the price is still relatively high,” Arie said in a discussion titled ‘Decarbonizing the Future: The Role of Green Fuel in Reducing Emissions’ held by the Editor Energy Society (E2S) on Thursday, October 10.
Arie explained that the scheme of the Palm Oil Plantation Fund Management Agency (BPDPKS) has helped to secure the supply of biofuel raw materials through export proceeds used for the biodiesel program. According to him, this approach can also be applied to other biofuels.
“BPDPKS is an interesting model for addressing price issues. This scheme can ensure prices remain competitive and accelerate bioenergy penetration in the domestic market,” he added.
The government is also planning to develop food estate land in Eastern Indonesia, which could become a new source of biofuel feedstock. “There is a potential land area of around 12 million hectares in Papua that could produce around 50 million tons of CPO in the future,” Arie said, indicating Indonesia’s great potential to develop biofuel production.
Taufik Aditiyawarman, President Director of Pertamina International Refinery (KPI), mentioned that KPI develops business schemes that involve various parties in the biofuel production chain, as has been done in the development of Matindok gas.
“We involve various parties, from upstream to downstream, to build an integrated biofuel ecosystem. In Cilacap, for example, we work with raw material suppliers in a Joint Venture scheme,” Taufik explained.
Meanwhile, Ali Ahmudi Achyak, Executive Director of the Center for Energy Security Studies (CESS), emphasized that in addition to supply challenges, biofuel prices are also a major obstacle.
“Biofuels and New Renewable Energy (NRE) are often considered expensive energy because their use scale is not as big as fossil energy. Therefore, support and incentives from the government are needed to reduce prices and ensure the availability of raw materials,” Ali said.
Ali also highlighted the importance of implementing regulations that support carbon emissions reduction programs, such as carbon trading, carbon taxes, and carbon incentives. However, according to him, these policies must be well-designed and widely socialized, including in the regions.
“We often hear about carbon trading and carbon tax, but has it reached the regions? Comprehensive regulations and effective implementation will be very helpful,” he said.
With these challenges, the government is expected to expand incentive programs and strengthen its commitment to accelerate regulations and supportive infrastructure. Access to affordable feedstock and stable supply are essential elements for biofuels to become a more environmentally friendly and economical fuel alternative. (Hartatik)
