Pertamina launches biodisel in Indonesia

Palm oil biodiesel is being sold to industry by Pertamina, Indonesia’s state oil company, says Planet Ark.

There is no comment about sustainabilty, or biodiversity. Indonesia sees this as one move to reduce dependency on foreign oil.

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2 Responses to Pertamina launches biodisel in Indonesia

  1. Pradeep 14 November, 2008 at 12:49 pm #

    “With the introduction of the mandatory policy, biodiesel capacity would rise to 5 million kilo litres a year by 2010, the government said recently, although it could also push up the price of palm oil.
    You bet!

    Here is a link to a presentation made by folks from the Malaysian Palm Oil Board. Pertinent points they make are:
    1. Officially, the Malaysian government will not allow clearing forests (63% of land area) to make way for new palm plantations.
    2. Productivity (tonnes/hectare/year) for oil palm is 5-10 times that of soybean, rape seed, & sunflower.
    3. Malaysia exported 13.74 million tonnes of palm oil (produced ~16 MT) in 2007.

    My 2c on this issue:
    1. Malaysia is the world’s largest exporter of palm oil. Blending 5 million kilo litres of biodiesel (4.53 million tons (MT) of crude palm oil) would require 1.2 million hectares (ha) of land area. Malaysia currently has 4.3 million ha. of land (13% of its land area) under palm oil plantations producing ~16 MT of CPO/year. Currently, only 0.36 MT CPO equivalents of biodiesel are being blended into petroleum diesel. If we assume that the total production of CPO in 2010 is ~18 MT, this means that the exports of CPO from Malaysia would decline by ~4 MT CPO or by 25%. I am sure this will put some positive pressure on world palm oil prices.

    2. I am curious to know what criteria the Malaysian government uses to classify land as “forests”. Also, the glycerin to methanol technology you mentioned in an earlier post will also provide some of the methanol needed for the transesterification process to produce biodiesel from CPO (although I am afraid this will be a zero-sum end game, because to me, it does not make sense to use methanol to produce BD and glycerin, use the glycerin to produce methanol back again).

    3. An additional link is given below:
    Growth and global opportunities in biofuels for Malaysian palm oil

    4. Does anybody have info on life cycle GHG emissions for CPO/palm BD in SE Asia?

  2. Simon Robinson 17 November, 2008 at 10:43 am #

    Hi Paradeep,

    The only logical outcome of the Malaysian government’s mandatory policy on biofuel blending without damaging the forests is to build farms as large towers. Which shows just how absurd it really is. Trouble is that there aren’t many voters living in forests.

    If the policy goes ahead, then the price of palm oil will probably rise, growing palm oil will be more profitable than other crops, farmers will switch to it, (I know that it takes a while for a palm oil tree to grow big enough to start production) the price of other crops will rise and then there will be more pressure on the forests either from growers directly who will want to increase the size of their holdings to maximise revenue, or from the government (either explictly or tacitly) to increase the area farmed to keep the price of food low.

    The only way to stop prices rising is to convert more forest to oil plantations now, otherwise, as you point out, Malaysia will have effectively reduced the amount of land it has for edible palm oil production by about 25% when the policy is fully enforced. I’d be interested to see if that is happening now and what the Malaysian government is doing about it.

    I take your point about glycerine to methanol. Frankly, I think at the moment people are trying to position almost anything ending in -ol as a fuel. It might be better to convert the glycerol into methanol and use that in the process if the economics and energy balance are suitable.
    I agree It would be interesting to see what the life cycle GHG emissions for CPO/palm BD in SE Asia are. I shall ask around.

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