Samsung plans to build biofuel plant

South Korean conglomerate Samsung Group plans to build a biofuel plant in Riau, with an initial investment of about Rp 1.5 trillion. (1US$=Rp9,150)

Alhilal Hamdi, the chairman of the government?s team for development of biofuel, said in Jakarta on Monday that the Korean company would produce palm-oil based biofuel, which could be used as alternative to diesel oil.

For this project, Samsung has purchased an oil palm plantation covering an area of about 25,000 hectare in Riau to supply the raw material for the biofuel plant.

?The biofuel plant will have a capacity to produce about 50,000 kiloliters a year,? he said.

Currently, the government is formulating a regulation to require industries to use biofuel in production activities beginning September this year in a bid to reduce the country?s reliance on fossil-based fuel.

?The preparation for the mandatory use of biofuel has reached its final stage. We are still formulating the standards in determining the prices of the biofuel,? Alhilal said in Jakarta on July 09, 2008.

The government is also considering making a law requiring other industrial consumers, including big companies such as electricity firm PT Perusahaan Listrik Negara (PLN) and energy firm PT Pertamina, both owned by the state, to use biofuel. The law will among others regulate a gradual increase in the use of biofuel by the companies. (Bernard)