Ada Program Mandatory E10, Entrepreneur Curhat Kendala Bioethenol

JAKARTA - The government plans to mix 10 percent ethanol into fuel. The Ministry of Energy and Mineral Resources (ESDM) predicts the mandatory 10 percent bioethanol (E10) can be carried out in 2028 or sooner.

The bioethenol industry in Indonesia is also preparing to take a bigger role in supporting the government's clean energy program. But in the midst of its great potential, the sector still faces a number of obstacles that make bioethenol development steps as alternative fuels not optimal.

There are at least six major challenges currently facing the national bioethenol industry.

Chairman of the Association of Indonesian Spiritual and Ethanol Producers (Apsendo) Izmirta Rachman conveyed this at the DPR RI Commission VII Hearing Meeting (RDP) with the Directorate General of Chemical, Pharmaceutical and Textile Industries (IKFT) of the Ministry of Industry at the Parliament Complex, Senayan, Jakarta, Wednesday, November 12.

"Utilization of the production of the existing bioethenol fuel grade factory is still low," he said.

The production capacity is not yet optimally absorbed due to the lack of demand and strong policy support downstream. Furthermore, Izmirta highlighted regulations that are still a stumbling block.

"Bioetanol for fuel still includes Excise Extortion Goods (BKC)," he said.

This status makes production costs uncompetitive compared to conventional fuels. In addition, the government's actual program has not yet been fully regulated in the field.

"The mandatory bioethenol program has not run optimally according to applicable regulations," he said.

The fourth challenge arises in terms of price. The price formula set by the government has not been able to reflect the industrial economy.

"The bioethenol price formula for energy set by the government has not yet reached economics, there are no incentives, both fiscal and non-fiscal. Apart from the market mechanism (business to business), the absorption is still low," he explained.

In terms of raw materials, the industry is also not fully efficient. This condition causes the distribution of raw materials from outside Java to be inefficient and increase logistics costs.

"The absorption of molases raw materials has not been maximized because all molase user factories are located on the island of Java," explained Izmirta.

The last challenge is the domestic market which is also still flooded with imported products. He considered that a fairer tariff policy could help protect domestic producers to be able to compete in a healthy manner.

"There are still many imports of bioethenol to Indonesia, because the tariff policy is not as balanced as with Pakistan," he said.

Furthermore, said Izmirta, the current capacity of the national bioethenol industry reaches around 300,000 kiloliters per year, with five companies ready to support the production of bioethenol fuel grade for fuel.

"Four companies are located on the island of Java and one outside Java," he said.