Increasing Biodiesel Use in Indonesia may Aggravate Environmental Risks

The emergence of a food-vs-fuel dilemma in Indonesia had added to concern that a push from palm-oil based biodiesel will drive deforestation, a report in The Jakarta Post on March 24 said.  A researcher at the Centre of Reform on Economics (CORE), Eliza Mardian, said the continuing rise in domestic demand for biodiesel might see new land cleared for oil palm to increase output of palm oil.

The secretary general of GAPKI (Indonesian Palm Oil Association), Eddy Martono, however, took no issue with government plan to keep increasing the palm oil-derived fatty acid methyl ester (FAME) share in the mandatory biodiesel program, explaining that Indonesia’s palm oil stock was sufficient for the 40 percent blend (B40).  However, he stressed that Indonesia had to consider the declining palm oil production if it wanted to increase the bio share for the biodiesel program beyond 40 percent.  In that case, companies would have no choice but to ramp up refinery productivity, he added. 

CORE’s Eliza highlighted the importance of a strict monitoring system from the government as well as transparent, real-time reporting from palm oil industry players regarding stocks for cooking oil and biofuel to prevent future cooking oil crises in the country.