Greater push for biodiesel in Indonesia, Malaysia

Greater push for biodiesel in Indonesia, Malaysia

The rapid depletion of fossil fuel heightens the need for governments to
start implementing measures to reduce its dependency on natural oil and gas.

Alternative sources of energy is needed to aid this shift from traditional
fossil fuel, but not many are ready to make that full leap into green or
renewable technology.

Hence comes the biodiesel - a blend of vegetable oil with traditional fuel
that is more environmentally friendly.

In South East Asia, Indonesia is moving ahead of the rest of the pack to
implement B20 - an oil mix which contains 20 per cent of biodiesel derived
from palm oil - in its market since 2016.

With a population of about 250 million people, the Indonesiam government has
put forth in its policy which gives subsidy to end-users of the B20.

According to Indonesia's director of Bio Energy of the Ministry of Energy
and Mineral Resources Sudjoko Harsono Adi, since its implementation of B20
last year, Indonesia has been able to save up to US$1 billion from the
import of diesel.

"As a net oil import country, we really have no choice but to implement B20.
And by implementing B20, we are also allowing our palm oil farmers to earn
better income from their crop," Sudjoko told Malaysian delegates at his
office in Jakarta recently.

The three-day Jakarta trip organised by the Malaysna Palm Oil Board (MPOB),
was organised to get a first-hand experience on how Indonesia has been able
to introduce the B20 with minimal glitches.

During the trip, the Malaysian delegates were briefed on the implementation
of B20 in Indonesia by top officials from the Ministry of Energy and Mineral
Resources; a meeting with Industry Development Compartment of the
Association of Indonesia Automotive Industries (GAIKINDO) officials and a
site visit to Pertamina B20 terminal at Tanjung Priok, Jakarta.

This comes as no surprise as currently, Indonesia is the leading producer of
palm oil in the world with over four million oil palm farmers directly
benefiting from the government's initiative.

Surprisingly, the Indonesian public has given their full support to their
government to implement the B20.

"We are 100 per cent behind this government initiatives and so far, there is
no side effect on our trucks running on B20 except that some companies have
installed additional water filter to their trucks.

"Warranties (for B20) are given to all our trucks," said chairman of the
Indonesian Trucking Association Drs Gemilang Tarigan.

He added that currently, there are some six million trucks plying Indonesia
roads which are using B20.

Prior to its implementation, the Indonesian government has done a
comprehensive studies on B20 on its commercial vehicles for three years.

"Based on its finding, which was based on few models after 40,000km on the
roads, there was no side effect on the vehicles tested," said Abdul Rachim,
the secretary of GAIKINDO during their meeting.

Positive results

What was crucial was that the studies showed only positive results that is
good for the Indonesian Government, for the environment as well as the oil
palm farmers.

"Our studies is also verified by the Japanese automotive experts and we are
very happy to show then result of our finding based statistics with all of
you," he reiterated.

These results propelled the Indonesian government to hasten plans to
implement B25 by 2020 and perhaps even B30 by 2025.

"We are not duly worried about the truck makers because they must build
their vehicles to suit our needs and not vice versa," Abdul Rachim
reiterated.

And with the implementation of the B20, the Indonesian oil company Pertamina
has been distributing the B20 product to almost 90 per cent of the Indonesia
market.

Then remaining 10 per cent are for special cases such as for the military
and those who are living in faraway islands throughout Indonesia.

"And of course, neat diesel is also still available at selected stations for
premium private vehicles which are still bonded by warranties," quipped
Abdul Rachim.

Malaysia's efforts

From the Malaysian perspective, Malaysian Palm Oil Board (MPOB), as a
leading Government agency to implement biodiesel in the country, has
introduced B7 on the Malaysian market since 2015.

According to MPOB principal research officer Dr Harrison Lau Lik Nang, the
government plans to introduce B15 by 2020.

"The Indonesian experience showed that B10 should be acceptable in our
Malaysian market as diesel quality and engine types in both countries are
the same.

"We are not rushing into B15 yet as we want to implement it in stages, so
that all stakeholders will be duly aware of what is going on.

"This is because the more biodiesel we use, and the cleaner will our
environment be.

"Surely, we do not want to be left behind by the Indonesians in terms of
environment and greater reliance on biodiesel which, in turn will also
benefit our oil palm farmers," said Lau.

However, both the Malaysian Truckers' Federation (MTF), formerly known as
Pan-Malaysia Lorry Owners' Association and Association of Malaysian Hauliers
(AMH) cautioned that the implementation of B15 should not be rushed as the
stakeholders would bear the brunt if the B15 has negative impact on modern
trucks which are now used in the country.

"We have invested millions in our trucks, surely we want to make sure that
there will be nothing wrong with them in the long run," said MTF president
Anthony Tan Boon Siong.

Tan's view was fully supported by AMH president Nazari Akhbar, who said that
container trucks are as expensive, and thus, would emphasize on the need to
observe the warranty which these trucks are bonded to.

"Unless the government can give us the guarantee that our trucks will not be
dully affected by B10 or B15 in the long run, we will continue to voice our
concerns to safeguard the logistic industry in Malaysia.

"We hope that MPOB could organise a roundtable discussion between us and
vehicle dealers in Malaysia to resolve issues on engine warranties," said
Nazari.

And what also worry the truckers is the fact that the Malaysian Government
has still not come up with a blue print for the implementation of biodiesel
beyond 2020.

Thus, they hoped that the government will come up with a clear blueprint
that will benefit all stakeholders in the long run which will not only
benefit the current generation but for the future generation as well.

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Link to Original Article:
http://www.theborneopost.com/2017/05/03/greater-push-for-biodiesel-in-indone
sia-malaysia/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com