Palm Oil Biodiesel Industry In Indonesia
With palm oil prices shooting up, many small and medium scale farmers are now looking for alternative sources of revenue. Palm oil has been a staple of many rural economies for centuries. But despite its popularity and proven track record, Palm oil is also one of the most expensive ingredients in any bio-based product. Biodiesel from palm oil is not only cost effective, but also efficient and environmentally responsible means of obtaining fuel. Let’s look at the benefits of bio-solar systems, with special reference to Akalimantan, Sumatera and B30.
Palm oil palm plantations have contributed largely to deforestation in several countries, such as Malaysia, Indonesia and Vietnam. In the case of Indonesia and Vietnam, farmers have cleared large areas of rainforests to clear a larger quantity of woodland for agricultural production. The majority of this forest has now been destroyed or degraded. A study by the World Wildlife Fund found that over fifty percent of Sumatera trees have been severely affected by aerial spraying for monoculture palm oil. The Wilmar Malaysia Agriculture & Livestock Research (MWAR) found that the proportion of palm oil plantations damaged by environmental issues was much higher than any other crops.
A number of countries, including the Philippines and Malaysia, have passed laws requiring farmers to plant Biodiesel instead of Palm oil. The European Union has also expressed support for the idea, with the European Food Safety Authority stating that Biodiesel could provide a ‘cost-effective and viable” alternative to traditional biofuels. The European Commission has also set a goal of doubling its annual biofuel production by the year 2021 and is offering financial incentives to small farmers wishing to switch to Biodiesel technology. There is also strong Government support in the US for the use of biodiesel produced from soybeans, which can be blended into standard diesel engines.
Efforts to increase the volume of Biodiesel produced in Indonesia has led to an increase in the importation of palm oil from China and Vietnam. The introduction of a Biodiesel tax on goods imported from these countries has seen a sharp rise in demand for biodiesel from Malaysia as well. The increasing popularity of biodiesel from Asia has led to an increase in demand from Europe and North America. A report prepared by the Natural Resources Defense Council (NRDC), titled “Biodiesel – a Great Alternative”, estimates that the demand for Biodiesel in the US may double between 2021. The increasing popularity of biodiesel may also lead to a significant increase in imports of Biodiesel equipment from Europe and North America.
If this trend continues, there will be a growing demand for Biodiesel products in the years to come. The use of palm oil for biodiesel production has already received a fifteen percent reduction in 2021. However, the palm oil industry is not entirely dependent on Biodiesel as a fuel source, they have partnered with several other industries to make biofuel from a variety of biomass including wood, agricultural foodstuffs, and waste material. By using these other industries for their biodiesel requirements, they are able to offset a portion of their energy needs.
The other industries providing Biodiesel to major consumers in Indonesia include pulp and paper mills, coke companies, and others. Biomass Biodiesel can be made from biomass such as sugar cane, rubber, or other biomass that would normally be used to create petrochemicals. In a report prepared by an independent research organization in India, it was estimated that the United States alone could produce over twenty percent of their needed electricity by using biofuels from waste sources. The palm oil industry has been one of the key drivers behind the growth of the biodiesel industry in Indonesia. With the increasing demand and the low price of Biodiesel, both small and large scale industrial users of palm oil are now turning to biodiesel producers for their products.
