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INDONESIA’S EXPERIENCE ON BIOFUELS DEVELOPMENT Brussels, July 5 th 2007 REPUBLIC OF INDONESIA PURNOMO YUSGIANTORO MINISTER OF ENERGY AND MINERAL RESOURCES INTERNATIONAL BIOFUELS CONFERENCE

INDONESIA’S EXPERIENCE ON BIOFUELS DEVELOPMENT · indonesia’s experience on biofuels development brussels, ... roadmap of biofuels development ... pln (state owned electricity

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INDONESIA’S EXPERIENCE ON BIOFUELS DEVELOPMENT

Brussels, July 5th 2007

REPUBLIC OF INDONESIA

PURNOMO YUSGIANTOROMINISTER OF ENERGY AND MINERAL RESOURCES

INTERNATIONAL BIOFUELS CONFERENCE

Slide 2

OUTLINE

I. INDONESIA’S ENERGY POLICYII. WHY BIOFUELS?III. TARGET, BLUEPRINT, AND

ROADMAP OF BIOFUELS DEVELOPMENT

IV. PROGRESS OF IMPLEMENTATION ON BIOFUELS DEVELOPMENT PROGRAM

INDONESIAINDONESIA’’S ENERGY POLICY S ENERGY POLICY

SUPPLY SIDESUPPLY SIDE

DEMAND SIDEDEMAND SIDE

SECURITY OF SUPPLY

SECURITY OF SUPPLY

COMMUNITY AWARENESSCOMMUNITY AWARENESS

ENERGY PRICEENERGY PRICE

EXPLORATION PRODUCTION

EXPLORATION PRODUCTION

CONSERVATION(PRODUCTION OPTIMATION)

CONSERVATION(PRODUCTION OPTIMATION)

DIRECT SUBSIDYDIRECT SUBSIDY

DIVERSIFICATIONDIVERSIFICATION

CONSERVATION(EFFICIENCY)

CONSERVATION(EFFICIENCY)

Slide 3

Natural Gas, 28.57%

Coal, 15.34%

Oil51.66%

Geothermal, 1.32%

Hydro Power, 3.11%

Coal , 33%

Gas, 30%

Oil, 20%

BIOFUELS, 5%

Geothermal, 5%

Biomass, Nuclear, HydroSolar Energy, Wind Power, 5%

Coal Liquefaction2%

RE,17%

CURRENT ENERGY MIX (1 billion BOE)

OPTIMIZING ENERGY

MANAGEMENT

National (Primary) Energy Mix

National (Primary) Energy Mix of 2025(BaU Scenario) (5 billion BOE) National Energy Mix 2025 (3 billion BOE)

(Presidential Decree No. 5/2006)

NATIONAL ENERGY POLICYNATIONAL ENERGY POLICY(PRESIDENTIAL DECREE NO. 5 YEAR 2006)(PRESIDENTIAL DECREE NO. 5 YEAR 2006)

Gas, 20.6%

Coal 34.6%

Oil, 41.7%

Geothermal, 1.1%

Mini/micro Hydro Power Plant, 0.1%

Power Plant, 1.9%

Slide 4

Briquet Coal1.2%

BIOFUELS (Biooil)3.7%

Electricity40.1%

LPG19.0%

NG6.4%

CNG1.5%

Oil28.1%Briquet Coal

0.1%

BIOFUELS (Biooil)0.0%

Electricity36.1%

OIl53.1%

LPG10.6%NG

0.1%

CNG0.0%

ENERGY MIX TARGET 2010

Household and Commercial 2010Household and Commercial 2006

Transportation 2006 Transportation 2010

Gasoline54.0%

Automotive Diesel Oil45.9%

BIOFUELS (Bio-Diesel)0.0%

NG0.0%

Electricity0.0%

BIOFUELS (Bio-Oil)0.0% BIOFUELS (Bio-

Ethanol)0.0%

Gasoline46.5%

AutomotiveDiesel Oil42.3%

BIOFUELS (Bio-Ethanol)7.6% BIOFUELS (Bio-Oil)

1.9%

BIOFUELS (Bio-Diesel)0.4%

NG1.4%

Electricity0.0%

Slide 5

Electricity12.4%

Oil30.9%

LPG1.4%

Coal34.9%

Gas20.4%

Electricity13.1%

Oil43.8%

LPG1.1%

Coal22.5%

Gas19.6%

ENERGY MIX TARGET 2010 (continuation)

Power Plant 2006 Power Plant 2010

Industry 2010Industry 2006

Coal46.2%

Gas14.3%

Oil23.7%

Coal-Hybrid0.0%

BIOFUELS0.9%

Geothermal5.3%

Hydro9.6%

Coal71.4%

Oil2.7%

Gas8.3%

Coal-Hybrid2.2%

BIOFUELS0.8%

Geothermal6.8%Hydro

7.8%

Slide 6

WHY BIOFUELS ?1. High potential for BIOFUELS feedstock supply and land

availability that suitable for BIOFUELS plantation

2. Proven BIOFUELS technology by local potential (Engineering, Research and Development)

3. BIOFUELS industry allows community participations, including farmer

4. High number of unemployment (40 million people - 10 million is opened unemployment) and poverty (39.1 million people)

5. Opportunity of Regional Government’s to increase economic development

6. Opportunity in exporting BIOFUELS products

7. BIOFUELS is a clean energy that can reduce CO2 emissionSlide 7

BIOFUELS TARGET 2010

1. Job creation for 3.5 million unemployment

2. Increasing income for On-Farm and Off-Farm workers in BIOFUELS sector up to the Regional Minimum Payment

3. Development of BIOFUELS plantation in 5.25 million ha unused land

4. 1000 Energy Self Sufficient Villages and 12 Special BIOFUELS Zone

5. Reducing Fossil Fuel for transportation up to 10%

6. Reducing fuel subsidy

Slide 8

BIOFUELS FEEDSTOCKPalm Oil

Jatropha curcas

Cassava

BIOOILBIODIESEL

BIOETHANOLSugar cane

MA

IN F

EED

STO

CK

Coconut

Micro algae

Sweet sorghum

BIOOILBIODIESEL

BIOETHANOLSugar palm

UN

DER

DEV

ELO

PMEN

T

Sago

Corn

Seed of Hevea braziliancis

Aleurites molucana

Slide 9

FAST TRACK BIOFUELS DEVELOPMENT

Fast TrackEach Region

Developing its Bio-energy Potential

SPECIAL BIOFUELS ZONE

Create Job

Poverty Alleviation

Energy

SHORT RUN LONG RUNEnergy Self Sufficient

Village

• Infrastructure• Demplot• On time schedule• Explicit investment

employment ratio

Slide 10

ROADMAP FOR BIOFUELS DEVELOPMENT

Biodiesel

Bioethanol

Biodiesel Utilization10% of Diesel Fuel Consumption

2.41 million kl

Biodiesel Utilization15% of Diesel Fuel Consumption

4.52 million kl

Year 2005-2010 2011-2015 2016-2025

Biodiesel Utilization20% of Diesel Fuel Consumption

10.22 million kl

Bioethanol Utilization5% Gasoline Consumption

1.48 million kl

Bioethanol Utilization10% Gasoline Consumption

2.78 million kl

Bioethanol Utilization15% Gasoline Consumption

6.28 million kl

Bio-oil

BIOFUELS

Biokerosene Utilization1 million kl

Biokerosene Utilization1.8 million kl

Biokerosene Utilization4.07 million kl

BIOFUELS Utilization2% of energy mix

5.29 million kl

BIOFUELS Utilization3% of energy mix

9.84 million kl

BIOFUELS Utilization5% of energy mix22.26 million kl

- Pure Plantation Oilfor Power Plant

- Biokerosene

PPO Utilization0.4 million kl

PPO Utilization0.74 million kl

PPO Utilization1.69 million kl

Slide 11

BACKGROUND OF ENERGY SELF SUFFICIENT VILLAGE (ESSV) DEVELOPMENT

1. Indonesia has more than 70,000 villages, 45% of which are under poverty line.

2. Energy Self Sufficient Village is a program to fulfill the village’s needs on energy, to create job and to alleviate poverty through optimizing local community capability.

3. The target of this program is to release local community dependency on fossil fuel.

4. Energy Self Sufficient Village is implemented gradually, starting from the villages that have been prioritized by the Government.

Slide 12

ENERGY SELF SUFFICIENT VILLAGE (ESSV) FUNDING

State Budget

Department/Institution

State Own Company

Regional Government

Small/Medium Enterprise

ESSV

Funding Sources

Private SectorESSV

ESSVESSV

Slide 13

DEVELOPMENT OF SPECIAL BIOFUELS ZONE

SEED

CULTIVATION CULTIVATION

INDUSTRYPLN (STATE OWNED

ELECTRICITY COMPANY)

EXPORTPERTAMINA (STATE

OWNED OIL AND GAS COMPANY)

TRANSPORTATION

BIOFUELS LAND

BIOFUELS INDUSTRY

Slide 14

Availability of BIOFUELS Development Blue PrintAvailability of BIOFUELS Development Regulations and StandardsBiodiesel (B-5), has been sold in 201 gas stations in Jakarta and 15 gas stations in SurabayaBioethanol (E-5), which is known as Bio-Premium has been sold in Malang. Started December 2006 Bio-Pertamax has been sold in 5 gas station in JakartaStarted of Energy Self Sufficient Village using BIOFUELSCommitments of Investor to develop BIOFUELSBIOFUELS Producers, among others :

- Eterindo, Ltd.- Molindo Raya, Ltd.- Energi Alternatif Indonesia, Ltd.- Sumi Asih, Ltd.- Platinum, Ltd.- Lampung Destileri, Ltd.

BIOFUELS DEVELOPMENT PROGRESS

Slide 15

PRODUCTION OF FUEL GRADE BIOETHANOL – April 2007: 82,500 kl

BPPT Lampung2,500 kl/yr(cassava)

SUGAR GROUPLampung

70,000 kl/yrMolindo RayaMalang, Jatim

10,000 kl/yr

Slide 16

ADDITIONAL PRODUCTION OF FUEL GRADE BIOETHANOL:2 million up to 2.7 million kl/year (1.1 million ha): 2007 – 2010

Sugar caneCassava

SALIMGROUPSumsel

70,000 kl/yr70,000 ha

MITSUIPETROBRAS

Papua, Kalimantan,500,000 kl/yr200,000 ha

ANGELPRODUCT

Sultra10,000 kl/yr

8,000 ha

WILMAR GROUPLampung, Sumsel

70,000 kl/yr70,000 ha

SUGAR GROUPLampung,

Sumsel,Kalimantan

500,000 kl/yr200,000 ha

SUNGAI BUDILampung

120,000 kl/yr25,000 ha

MOLINDOLampung,

Kediri, Pacitan100,000 kl/yr

25,000 ha

SAMPURNAMadiun,

Pawonsari375,000 kl/yr100,000 ha

SORINI TbkSultra,

200,000 kl/yr150,000 ha RNI, PTPN

2,8,8,9,10,11,14Sumut, Lampung, Sulsel, Jawa, NTT

200,000 kl/yr60,000 + 40,000 ha

MEDCOLampung,

Jabar,Kalimantan

270,000 kl/yr50,000 ha

EN3 KoreaSulsel,

180,000 kl/yr45,000 ha

Slide 17

PRODUCTION OF BIODIESEL – April 2007: 520,000 kl/Year

WILMARGROUP Dumai

350,000 kl/yr(CPO)

ETERINDOGresik &

Tanggerang120,000 kl/yr

(CPO)

BPPTSerpong

300,000 kl/yr(CPO)

RAPBintaro

1,650 kl/yr(CPO)

PTPN 4 & GANESHA

ENERGI Medan4,000 kl/yr

(CPO)

SUMIASIHBekasi

40,000 kl/yr(CPO)

EAI Jakarta500 kl/yr(CPO)

DHARMA4,000 kl/yr

(CPO)

Slide 18

ADDITIONAL PRODUCTION OF BIODIESEL : 2 million kl/year (3.6 million ha): 2007 – 2011SawitJatrophaWILMAR

GROUPSumatra, Borneo

1,000,000 kl/yr180,000 ha

SINARMASDumai

400,000 kl/yr

BAKRIE,INDOFOOD,ASIANAGRO

SUMIASIHSumatra, Jawa

600,000 kl/yr

TOLARAMKalbar

110,000 ha

BPNTT, Papua,Kalimantan100,000 ha

SWEDENBIOENERGY

NTT 350,000 kl/yr100,000 ha

APROBIGROUP

Kalimantan100,000 ha

INDOMALSula &

Merauke300,000 ha

GENTINGGROUPMerauke

400,000 ha9 BADANUSAHAMerauke

340,000 ha

SINARMASKalbar,

Merauke440,000 ha

MUTING GROUPMerauke

290,000 ha

CLEANBIOFUELGorontalo50,000 ha

ASIATIC GROUPKalbar

80,000 haBUMN AGRORiau, Jambi,

Sumsel,Kalimantan, Papua

Inti 220,000 haPlasma 880,000 ha

INDOMAL+PTPNMedan, Banten,

Pekanbaru1,500,000 kl/yr

PERTAMINADumai,

Balongan,Balikpapan500,000 kl/yr

Slide 19

POWER PLANTS USING BIOFUELS

No. Location Numbers of Power Plant

Total Capacity (MW)

1 North Sumatera 1 4.5

2 Maluku 7 4.0

3 Riau and The Islands of Riau 2 14.1

4 Lampung 1 11.0

5 Bali 1 1.5

6 South Kalimantan 5 19.8

7 East Kalimantan 7 16.0

Slide 20

Energy and Mineral Resources Department www.esdm.go.idwww.mesdm.net