Sawit Industry Ready For CPO Supply For B40 Program

Illustration. (Photo: Doc. Antara)

JAKARTA - The Indonesian Palm Oil Association (GAPKI) stated that it will continue to consistently supply CPO for domestic B30 needs. GAPKI also predicts that, in the future, there is a possibility that the supply of palm oil for the biodiesel program will increase, especially when the proportion of palm oil is increased to 40 percent, aka B40.

"Currently, the total supply of CPO that can be supplied by GAPKI reaches 9.3 million tons", said GAPKI Secretary General Eddy Martono Eddy in Jakarta, Tuesday, August 30.

The Palm Oil Plantation Fund Management Agency (BPDPKS) noted that currently, Indonesia is the first country in the world that has mixed renewable energy into diesel oil reaching 30 percent or B30. Other countries, such as Argentina, Brazil, and the United States, have just entered the B10, B12, and B20 schemes.

Notes from the Directorate General of New, Renewable Energy and Energy Conservation (EBTKE) of the Ministry of Energy and Mineral Resources (ESDM) stated that the realization of B30 distribution until August 27, 2022, reached 6.4 million kiloliters (kl), up 63 percent from the allocation of 10.15 million kl.

GAPKI explained that it is open to review from all parties, especially for the increase in oil palm blending carefully. The reason is, that the program will have an impact on other palm oil derivative products. Especially between production and local food needs, local non-food needs, and energy.

"So that there is no need for food, compete with non-food and energy", he said.

Need Rejuvenation

To maintain supply in the future, Eddy suggested various related parties try to increase the productivity of community gardens, including through replanting or replanting.

"Because the past planting of community gardens was contaminated with fake seeds, productivity was low. In addition, the plant (palm) is indeed the time to be rejuvenated", he said.

On a separate occasion, the Director General of EBTKE at the Ministry of Energy and Mineral Resources, Dadan Kusdiana, in Jakarta on Monday, August 29, said that currently there are several challenges in biodiesel development in Indonesia.

These challenges are incentives to cover the difference between the market index price (HIP) of BBM and HIP of Biodiesel, which is still dependent on levies on export funds. Another challenge is the fluctuation of palm oil (CPO) and world oil prices, as well as low oil prices and high CPO prices.

This causes the HIP disparity between the prices of biofuels (BBN) and fuel (BBM) to widen.

"Some of the supporting materials for biodiesel production still depend on imports", added Dadan.

In addition, the large technological component originating from abroad, makes the inflation rate can greatly affect the value of the investment. Not to mention, there are still infrastructure limitations in some areas.

For example, limited storage tanks at the fuel oil terminal (TBBM) handover point, and Jetty facilities. Then, the availability of ships that meet the requirements for transporting fatty acid methyl esters or FAME.

Dadan also stated that the diversification of raw materials as a substitute for biofuel production of diesel (green diesel) still takes time to develop.

"It is necessary to increase public awareness, through socialization related to biofuels, especially biodiesel. Moreover, there is a negative campaign from outside markets that causes difficulties in exporting Indonesian biodiesel products", he said.

Meanwhile, Aprobi Daily Chairman Paulus Tjakrawan said, in line with government policy support, biodiesel consumption had a positive trend in the last decade. Meanwhile, biodiesel production has experienced rapid growth in the last 16 years.

"The total installed production capacity will reach 16.6 million kiloliters until 2021", Paulus said.

Still based on Aprobi data in the last two years, B30 distribution has managed to reach 8.43 million kiloliters in 2020. Then it reaches 8.44 million kiloliters throughout 2021.

In 2022, Paulus estimates that the allocation for B30 distribution will reach 10.15 million kiloliters. The use of palm oil for biodiesel is estimated at 15 percent of the total national palm production which will reach 48.09 million tons in 2021.

Entering 2022, the use of palm oil for biodiesel is predicted to be 17 percent. Most of the domestic consumption of palm oil is used for food needs, especially cooking oil.

"Biodiesel is part of accelerating the national energy transition program. The development of palm-based energy continues like bio-hydrocarbons. From the development of bio-hydrocarbons it can produce gasoline and palm-based aircraft fuel", he said.

The use of biodiesel is also effective in increasing the absorption of domestic palm oil when demand weakens in the global market. Paulus said that the use of biodiesel helps improve the welfare of farmers, once there is a balance between consumption and exports.

The positive impact is that there is stability in the price of Fresh Fruit Bunches (FFB) for oil palm farmers in the country. In fact, from 2021 to March 2022, the average FFB price for farmers is above IDR 3,000/kg.

"It is not true to say that biodiesel benefits corporation. In the field, this program also supports the increase in the price of palm fruit for farmers", he said