Govt obliges motorized vehicles to use biofuel in 2008
Monday, August 27 2007 - 03:12 AM WIB
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that starting 2008, the use of biofuel as fuel for motorized vehicles will be mandatory, no longer voluntary as it is now, Investor Daily reported Monday.
Purnomo said that from 2008 through 2010, the biofuel content in diesel and gasoline would be increased by 20 percent from the current 2.5 percent.
In implementing the program, the Minister said, the government would appoint state oil and gas firm PT Pertamina and state electricity company PT Perusahaann Listrik Negara (PLN) to act as off taker or standby buyer of the biodiesel and bioethanol produced ny the local industry.
“The government will also prepare special biofuel zone to speed up investment process related to the land used for biofuel industry in Merauke, Papua,” said Purnomo in last week.
Evita Legowo, secretary of the National Team on Biofuel Development, indicated that the use of biofuel in the country has failed to grow due to the lack of the government's supports. The government has promised to provide subsidy for the sale of the fuel but it had yet to fulfill its promise. Consequently, Pertamina has to cover up the increasing production cost when the price of palm oil used as a raw material for bilodiesel soared high and biofeul has failed to compete with oil-based fuel which cost cheaper due to the government's subsidy.
According to Evita, scrapping the 10 percent sales tax on palm oil used as raw material for biofuel production can be one of the actions the government should take to encourage biofuel producers to increase biofuel content in diesel or gasoline. Another action is by mixing the content of biodiesel with that of non-subsidized fuel products.
Evita said that the government has targeted to open 5.25 million hectares of land as plantation areas for the development of biofuel until 2010. Out of the targeted area, 1.5 hectares is for the palm oil plantation, 1.5 hectares for jatropha, 750,000 hectares for sugar cane, and 1.5 million for cassava plantation.
Evita said that government’s biofuel production target for 2010 is set at 16.62 million tons. (*)