Oil Palm Bio-Hydrocarbon: The New Solution of Energy Security

Indonesia’s current energy security still depends on imports of fossil fuels. This has been going on since 2006 and has weighed heavily on the country’s foreign exchange to meet the gap between production and fuel consumption in Indonesia. According to Siregar’s calculation (2018), Indonesia currently has a deficit of 80.9 million liters per day or 700 thousand barrels per day and burdens the country’s foreign exchange of 49 million USD per day (if calculated using the price of fuel oil 70 USD per barrel and 1 USD = Rp. 14,900, – or equivalent to Rp. 730.1 billion per day. This shows that Indonesia’s energy security is feeble due to its dependence on fossil energy sources.

Oil palm industry as a strategic industry in Indonesia, on the other hand, provides a solution to achieving energy security by shifting palm products to renewable energy sources. Since 2008, the government has implemented a mandatory biodiesel policy to reduce Indonesia’s diesel imports. Furthermore, since the beginning of September 2018, the implementation of this policy has been extended to the non-public service obligation sector so that it will have more impact on saving diesel fuel imports.

In addition to biodiesel, Indonesia is currently focusing on the shift of palm oil further to producing bio-hydrocarbons as a renewable energy source. Through this palm bio-hydrocarbon, Indonesia can produce premium fossil green gasoline, green substitute avtur for fossil avtur, and also green diesel instead of fossil diesel fuel. These bio-hydrocarbons are targeted to be produced on an industrial scale in 2020. This finding can reduce the number of Indonesian fossil fuel imports which are projected to be even greater as the number of Indonesians’ needs increase. According to USDA data (2017), Indonesia’s fossil fuel needs in the year 2025 reached 114 million kl with the following details: gasoline as much as 54 million kl, diesel as much as 53 million kl, and jet fuel as much as 7 million kl.

According to calculations, 1 ton of CPO can produce 5.24 – 5.96 barrels of bio-hydrocarbon (1 barrel = 115.63 liters). With the number of Indonesian CPO production which is more than 30 million tons, the development of bio-hydrocarbons is very potential to be used as a new solution for Indonesia’s energy security. The development of domestic bio-hydrocarbons will absorb large quantities of CPO as raw material for production, which is around 30.3 million tons by 2020. This will certainly reduce Indonesia’s dependence on CPO exports. Indonesia’s production of CPO will be used for domestic needs both for food, chemicals and renewable energy sources.

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