Biodiesel’s economic value reaches 4 bln USD

Jakarta (Indonesia Window) – Indonesia is committed to continuing the mandatory biodiesel program considering that this commodity has a large economic value of 4 billion U.S. dollars in 2021.

“In 2021, the economic value of implementing B30 reached more than 4 billion US dollars and it has succeeded in reducing greenhouse gas emissions by up to 25 million carbon dioxide equivalent,” Minister of Energy and Mineral Resources Arifin Tasrif said in a statement in Jakarta on Thursday (March 24).

Arifin said the government would not stop at developing B30 as the Ministry of Energy and Mineral Resources has planned to increase the blending of higher bioenergy sources by applying green fuels.

Currently, the government is conducting various comprehensive studies, including preparing a techno-economic study, regulatory framework, incentive facilities, infrastructure, setting product quality standards, and developing supporting industries.

So far, the Ministry of Energy and Mineral Resources has succeeded in conducting flight tests using 2.4 percent bioavtur to reduce emissions in the aviation sector.

In the future, the Ministry of Energy and Mineral Resources will implement sustainability indicators in the form of economic, social, and environmental indicators.

In 2022, the Ministry of Energy and Mineral Resources will start implementing voluntary biodiesel sustainability indicators on the downstream side.

“We hope that in the near future these biodiesel sustainability indicators can be applied, both upstream and downstream,” said Arifin.

Biodiesel is a biofuel consisting of a mixture of methyl ester compounds from long chain fatty acids as an alternative fuel for diesel engines.

Biofuel produced from renewable sources such as palm oil provides added value through downstream domestic agriculture, stabilizes crude palm oil prices, improves the welfare of small farmers, produces less greenhouse gas emissions, reduces oil imports, saves foreign exchange and trade balance, provides employment and maintains national energy security.

In 2022, the Ministry of Energy and Mineral Resources has set a biodiesel allocation for the domestic market of 10.15 million kiloliters. This policy takes into account the assumption of a 5.5 percent growth in demand for diesel oil with an estimated demand of 33.84 million kiloliters.

Reporting by Indonesia Window