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Biofuel producers are urging the government to make the use
of biofuel compulsory in order for the eco-friendly fuel business to
become more economically viable.
A member of the Indonesian Biofuel Producers Association Paulus
Tjakrawan told The Jakarta Post over the weekend that such a
regulation, in which industry players and vehicle owners were required
to use a certain amount of biofuel, was needed for the development of
the biofuel industry.
Paulus said the Philippines government had been courageous last year
when they decided to adopt a similar policy.
"In the first year the biofuel legislation was introduced, every
factory and vehicle in the Philippines was required to use at least one
percent of biofuel in its fuel usage, and in the second year, that
percentage when up to two percent.
"The country has already established a very clear road map, even though
they only started the program last year," Paulus said.
Such a move in Indonesia would not harm businesses across the board,
Paulus said, as fuel costs would still be quite acceptable.
"In fact, it would bring benefits to companies in that they could
create an image of being an environmentally friendly business, which
has become quite a selling point these days amid the increasing
awareness of environmental and climate issues," he said.
The association also hopes the government will offer incentives in the
form of tax relief to biofuel producers.
The president director of biofuel producer PT Eterindo, Immanuel
Sutarto, has questioned the feasibility of the biofuel business in the
long run, as producers will have to cope with the increasing prices of
crude palm oil (CPO) and ethanol, which are two major raw materials
used to produce biofuel.
State-owned oil and gas company Pertamina declared last week that the
company planned to scrap its biofuel business by the end of this year
as its biofuel products -- BioSolar and BioPremium -- caused the
company to lose Rp 16.9 billion (approximately US$1.8 million) last
year due to increasing ethanol and CPO prices.
Pertamina marketing and trading director Achmad Faisal urged the
government to provide financial incentives for producers of ethanol and
CPO.
Evita H. Legowo, the first secretary of the National Biofuel
Development Committee, said the government was considering halving the
tax rate on biofuel used in cars, trucks and motorbikes to 2.5 percent
from the current five percent.
Evita also said the government would consider adopting the methods
employed by developed countries to promote biofuel usage, such as
imposing additional taxes on conventional fuels.
Indonesia is expected to produce 600,000 tons of biofuel this year.
Among the major producers are PT Wilmar with a production rate of
350,000 tons per year, Eterindo with 120,000 tons per year and PT Sugar
Group with 70,000 tons per year.
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