by Fransiska Nangoy and Bernadette Christina (Reuters) … Indonesia imported about 60% of the gasoline it burned last year at a cost of $17 billion, and it aims to replicate the success it had with biodiesel mandates that cut billions of dollars from diesel import bills.
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This year the government plans to test gasoline with 5% bioethanol in Surabaya, capital of East Java province, energy ministry official Dadan Kusdiana told Reuters.
Indonesia plans eventually to mandate bioethanol content for gasoline at 15% and use it nationwide by 2031, an aggressive target when it has only two bioethanol plants that struggle to secure enough sugar molasses feedstock.
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With limited bioethanol capacity and the country relying on imported sugar to meet domestic demand, including for food, some companies are looking to produce bioethanol from other feedstocks such as cassava and biomass, possibly from palm oil kernel waste and palm trunk sap.
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State energy company Pertamina also plans to build a facility to produce bioethanol from cassava and mix gasoline with 5% bioethanol and 15% methanol for a blend it calls A20, its chief executive told a parliamentary hearing in January.
Pertamina has not said if the methanol would also have a bio source.
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“Biomass waste can be converted to ethanol via enzyme hydrolysis or fermentation. One major advantage is that there is no competition with food. However, the technology is not yet proven at a commercial scale and costs are high,” she (Yitian Lin, a research associate at Wood Mackenzie) said.
Regardless of the feedstock, subsidies similar to those given to palm biodiesel would be critical to ensure wide adoption of bioethanol, Lin said.
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In February, Indonesia raised its mandatory biodiesel mix to 35% palm oil-based content from 30% in 2020. Its eight-year programme has cut diesel imports, helped turned a current account deficit to surplus and mopped up excess output resulting from the increasing difficulty in shipping palm oil to Europe.
It has also tested diesel with 40% biodiesel content, and Pertamina last year started producing 3,000 barrels per day of diesel for export made entirely from palm oil.
Indonesia reduced 2022 diesel import costs by $8.34 billion via its B30 mandate and expects to save $10.75 billion this year with the B35 mandate, according to government data.
The palm industry may also help solve the bioethanol problem through biomass supply if the technology and production processes can be worked out.
Indonesia could make about 5.6 million kl of bioethanol a year from palm trunk sap alone, ITB found, based on a 4% replant rate of 16 million hectares of palm plantations.
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