Indonesia, world’s largest producer of palm oil, to force manufacturers to use biofuel


The Associated Press ,  Jakarta   |  Thu, 07/10/2008 4:52 PM  |  Headlines

Indonesia, the world’s largest producer of palm oil, plans to force manufacturers to use biofuels for some of their energy needs to reduce dependence on imported oil amid soaring global prices.

The government also wants to cut spending on fuel subsidies, which were put in place decades ago to protect the country’s poorest but now account for almost half the budget.

Efita Legowo, a member of the Energy Ministry’s biofuel team, said a decree would be issued in October stipulating that factories use palm oil and other cleaner burning fuel for 2.5 percent of their total needs.

The nation of 235 million people sees promoting the biofuel sector as a way of reducing dependence on foreign oil while alleviating poverty and creating jobs. But lawmakers worry it will
push up the price of palm oil, which is widely used for cooking by the poor.

Environmental groups also warn it will contribute to the destruction of forests in Indonesia’s Kalimantan region, where massive oil palm plantations are being established to meet global

The new energy policy sets a target of making biofuels account for 5 percent of the energy mix by 2025. Some critics of a similar European Union plan say the push for the use of biofuels is a major factor in soaring food prices.

Together, Malaysia and Indonesia provide 87 percent of the world’s palm oil. Nearly 15 million acres (about 6 million hectares) is covered by palm-oil plantations. (***)



Leave a comment

No comments yet.

Comments RSS TrackBack Identifier URI

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s