Indonesia & Malaysia moving ahead in South East Asia biodiesel market developments

In a new record, Indonesia has consumed as much as 2 million kiloliters of biodiesel in the period between January and October 2016. The government had introduced biodiesel to stabilize the country’s palm oil prices and also to address climate change.

The total consumption of 2.06 kiloliters in the first 9 months of the year translates to almost the monthly requirement of Indonesia.

However only about 7 percent of the 33 million tons of crude palm oil produced in 2016 was used to make biofuel. The Indonesian government aims to raise this number to 26 percent by 2020. Already the use of biodiesel has helped Indonesia reduce 4.3 million tons of carbon dioxide from its greenhouse gas emissions this year. Indonesia expects to obtain 23 percent of its energy from mixed and renewable sources, including biofuels and raise this percentage to 30 percent by 2050.

The other key South East Asian player – Malaysia is planning to raise the current B7 biodiesel mandate to B10. The biodiesel B10 is a blend of 10 percent palm methyl ester (PME) and 90 percent regular diesel while B7 is of a lower blend of 7 per cent PME.

The new measure will also require the industrial sector to start using the B7 blend. The industrial sector has until now been using regular diesel.

The new mandate is expected to create demand for 800,000 tonnes of palm oil per year to be converted into PME. The initiative is expected to help Malaysia’s palm oil stocks and support palm oil prices in the international market.

The Malaysian government, via the Ministry of Plantation Industries and Commodities and its agency Malaysian Palm Oil Board, has taken a gradual approach in rolling out the B5 and then B7 blends in the country.

The country’s biodiesel producers supply PME to the transport sector, starting June 2011 with the B5 programme. Thereafter, the blending percentage was raised to B7 in November 2014.

More about biodiesel market developments will be discussed at CMT’s 3rd Biomass & BioEnergy Asia on 27 February- 1 March, 2017 in Jakarta.

For more information about the event, contact Ms. Hafizah at hafizah@cmtsp.com.sg or call 65 6346 9218.

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Indonesia Consumed More Than 2 Million Kiloliters of Biodiesel in 2016

B10 boon set to support palm oil industry


Air Water set to build Biomass Power Plant in Fukushima

Japan’s industrial gas supplier – Air Water is planning to invest 20 billion yen ($181 million) in a biomass power plant in Fukushima Prefecture. The plant, expected to be one of the biggest biomass power plants in Japan, will have a capacity to produce 75,000kW of electricity.

With a projected start date in 2020, the plant is at par with the biomass power plants built by Sumitomo Corp in Aichi Prefecture, eRex and Kyushu Electric Power subsidiary’s project in Fukuoka Prefecture.

Expected to be the largest domestic power generator, the plant will consume only biomass feedstock. The Osaka based company plans to procure feedstock such as coconut shells, etc., that are produced as waste by palm oil factories in Indonesia and Malaysia, as well as wood pellets from Southeast Asia, North America and other places.

Air Water plans to sell the electricity mainly to Tohoku Electric Power under the feed-in tariff system for renewable energy. Biomass power generators (that consumes coconut shells and imported materials) are allowed to sell 1 kw per hour of electricity for 24 yen for two decades.

The company is also considering selling power to newer retail electricity providers or use it in group operations.

Apart from this biomass power plant, Air Water also plans to build a co-fired plant using both biomass and coal in Yamaguchi Prefecture – in a joint venture with Chugoku Electric Power.

More on Japan’s biomass power projects at 8th Biomass Pellets Trade & Power on 15-18 May, 2017 in Tokyo.

For more information about the conference, contact Ms. Hafizah Adam at hafizah@cmtsp.com.sg or call (65) 6346 9218.

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EU’s Proposal on New Sustainability criteria for Forest Biomass

As the world steps up measures to mitigate the effects of climate change, the European Commission is proposing a new sustainability criteria for forest biomass.

The importance of a new system for forest biomass sustainability has been reiterated by several European forest owners and managers. The new criteria is part of the Clean Energy package.

Europe’s two major regulatory proposals, LULUCF and REDII, is up for consideration by the European Parliament and Council.

Already ample legislation and management systems are available to safeguard the sustainability of forest biomass – which is largely a domestic, decentralised energy source.

What’s notable is that Europe’s forests are not driven by the need for biomass for energy. In fact biomass feedstock used for producing bioenergy is a side product of higher-value timber. Therefore, any demand for bioenergy does not put Europe’s forests at risk. This is a key aspect that EU policy makers need to consider while enacting new sustainable criteria for solid biomass production.

The proposal must therefore avoid unacceptable burdens for the forest owner and be carefully analysed. Some of the stakeholders are of the opinion that carbon emissions can be reduced through the development of forests and their sustainable use. Europe is home to forests that are a source of natural, sustainable and renewable raw material that can be transformed into forest products and replace fossil fuels and highly energy-intensive materials.

The EU has already published proposals to increase the share of renewables to 27% by 2030. The Clean Energy package directs the promotion of use renewable energy resources, including minimum criteria to demonstrate the sustainable production and efficient use of biomass in transport, heat and power.

More on biomass energy regulations will be discussed at 2nd Biomass Trade & Power Europe on 13-14 February, 2017 in Copenhagen.

Email Ms. Hafizah at hafizah@cmtsp.com.sg or call +65 6346 9218 for details for the event.

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