Indonesia plans to subsidize biofuel

Indonesia’s government plans to give biofuel producers a subsidy to encourage them to remain in business as well as to promote the widespread use of alternative energy sources, Evita Legowo, director general of oil and gas at the Energy Ministry, said. The government wants to make the use of biofuel mandatory starting 2009 to ensure the survival of the fledgling industry, an aim made more urgent since biofuel has become more expensive than crude oil-based fuel after crude oil prices collapsed late last year. “At the moment, palm-based biodiesel is more expensive than crude oil-based diesel, but prices of bioethanol are not,” Legowo said. Palm-based biodiesel prices were around Rp5,800 (US$0.49) per liter in late January, or about Rp1,500 (US$0.13) higher than diesel fuel, Indonesian Biofuel Producers Association Secretary General Paulus Tjakrawan said. (January 30, 2009)