Indonesian state power firm queries government’s biodiesel rule

PLN, an Indonesian state power firm, has announced that  it cannot comply with government rules on burning diesel with a bio content of at least 30% as it would damage generators, potentially curbing demand for biofuel ingredient palm oil in the world's top producer of that commodity, according to news agency Reuters.

Under regulations released in 2015, Jakarta mandated that the power industry should from this year use so-called B30 biodiesel, hoping to reduce its crude oil import bill, cut greenhouse gas emissions and stoke local appetite for palm oil, Reuters reported.

Less-than-expected growth in bio consumption by Indonesia's largest diesel buyer could weigh on palm prices as more supplies are diverted to the global market.

Chairani Rachmatullah, head of PLN's fuel and gas procurement division, told Reuters: "It's risky if we use B30 (because) machinery can shut down.

"Eventually the machinery gets clogged with residue like slagging causing blockages, and then it breaks down," she said, adding that diesel with a bio content of 20% would be "safer".

The official in charge of government biofuel policy said the biodiesel rule should be no problem for PLN, and that his office would investigate the issue and could apply sanctions. He did not specify what measures the ministry could take.

"If there's no problem for vehicles, logically there should be no problem for power," said New and Renewable Energy Director Rida Mulyana.

"I definitely don't want to pull back from this mandatory regulation."

Indonesia's automotive industry association has said high biodiesel concentrations can lead to engines overheating and greater fuel consumption, the news agency reported.

Indonesia's efforts to diversify energy sources have faced criticism from power station developers.

Diesel contributes around 5% of Indonesia's energy mix for electricity generation, and is the fuel of choice for smaller generators in many outer islands in eastern Indonesia.

Packaging to biofuels

The news comes as Indonesia-based paper and packaging firm Asia Pulp and Paper (APP) announced its support for a new community-led biofuel pilot initiative.

The initiative aims to help reduce the use of fossil fuels in Indonesia, increase the availability of renewable biofuels, provide incomes for local communities and help to reduce the vulnerability of Indonesia’s forest to fire, degradation and deforestation.

The pilot, the result of the jurisdictionally-based partnership to support green growth between APP, the Governor of West Kalimantan and the Belantara Foundation will find suitable land to be planted with Kemiri Sunan (a flowering plant), as a community plantation or as a restoration area.

The pilot will find suitable land to be planted with Kemiri Sunan, a rapidly emerging potential source of biofuel, to supply Indonesia’s B15 / B20 (biodiesel blend) biodiesel programme and key export markets for biofuels. This pilot will initially focus upon its development as a community crop through smallholder farmer co-operatives.