Indonesian plant to produce 30 mln litres biofuel per annum

Indonesian plantation company PT Perkebunan Nusantara X says it will build a bioethanol production plant in Mojokerto, East Java, with a total capacity of 30 million litres of fuel annually.
Finance director Dolly P. Bulungan said the facility would be the first ever bioethanol plant operated by a state-owned company in the country and that it expected to commence commercial production in March 2013.

Dolly said the project would cost USD48 million, of which USD4 million would come from cash on hand, USD28.8 million in the form of a loan from Bank Mandiri and USD16.6 million through a grant from Japan’s New Energy and Industrial Technology Development Organization (NEDO).

The production plant will be located on an 8-hectare area and surrounded by the company’s sugar plantation, which spans from Sidoarjo to Tulung Agung producing up to 250,000 tonnes of molasses annually — the raw material for bio-ethanol.

Maritje Hutapea, the Energy and Mineral Resources Ministry’s director of bioenergy, said domestic utilization of bioethanol had suffered from unattractive pricing.

“We will hold a meeting with the Coordinating Economic Minister on July 24 to create a new pricing formula,” she said.

Maritje said the ministry would propose 1.62 times of the Southeast Asia bioethanol index, which refers to bioethanol pricing in Thailand, set by Argus. Indonesia’s current formula is the Argus price, plus domestic ethanol pricing, divided by two.

To cope with the climate impact of the excessive use of fossil fuels, the government is accelerating the use of new and renewable energies by issuing a presidential regulation on national energy policy, which stipulates that the use of new and renewable energy is projected to reach 17 percent of the total national prime energy use by 2025.

The government also announced recently that it would pilot bioethanol production from palm oil stems, which would make use of the abundant by-product from the country’s plantations.