Indonesia allots 6m hectares for biofuel

Indonesia has earmarked 6 million hectares for development of its biofuel industry, part of plans to reduce its dependence on crude oil and susceptibility to price fluctuations, its energy minister said Friday.

"Our target to develop our biofuel industry is by 2009-2010," said Energy Minister Purnomo Yusgiantoro. "And we have plans for 6 million hectares (14.8 million acres) of development, worth about US$20 billion (euro15.6 billion)."

Yusgiantoro said it was part of a grand strategy to reduce Indonesia's dependence on fossil fuels. Despite being one of Asia's largest crude oil producers, Indonesia is a net oil importer because of decades of declining investment in exploration and extraction.

A move by the administration to reduce fuel subsidies last year triggered widespread protests in the Southeast Asian nation of 220 million, where many earn meager wages.

"It's no more about increasing production or reducing consumption or subsidies ... it's now about a move to alternative fuels," he said. AP reported Friday.

He said Malaysia's diversified conglomerate Genting Bhd. had already approached the government for a 1 million hectare (2.47 million acre) allocation for biofuel development in palm oil and sugar cane.

"Indonesia is a large country and we have the land ... in Sumatra, in Kalimantan, in Papua, in other places," he said. "So, if the request is 1 million hectares, then (we can handle it)."

Genting controls plantations company Asiatic Development Bhd. and has investments in oil and gas exploration and power generation.

Yusgiantoro was part of a large delegation that accompanied President Susilo Bambang Yudhoyono for an investment push in Malaysia, which shares close historical and social ties with Indonesia. (*)