Faced with soaring oil prices, Indonesia turns to biodiesel

With global oil prices continuing to soar, Indonesia is joining other countries in the race for alternative fuels at the pump. High costs, a lack of private-sector zeal, and environmental and social concerns are among the obstacles here on the road away from heavy dependence on fossil fuels and toward alternatives such as biodiesel – a fuel that can be made from vegetable oils.

“Many crude palm oil companies want to make biodiesel for themselves, to run their factories,” says Tatang Soerawidjaja of the Indonesian Biodiesel Forum. “But when it comes to making it to sell at the petrol stations, they say there’s no profit in it.”
Indonesia should be well-situated for the production of biodiesel. With Malaysia, it controls nearly 85 percent of the production of crude palm oil (CPO). But nearly 10 million tons of Indonesia’s 15-million-ton production of CPO is exported, and export demand is rising. Edible palm oil, extracted from the fruit of the oil palm tree, is used in everything from chocolate and margarine to soap and lipstick.

The demand to use CPO in biodiesel is also increasing in Europe, as well as in Colombia, India, South Korea, and Turkey, which will drive prices still higher.

Christian Science Monitor