We have to develop biofuel as a substitute for fossil fuel.
Jakarta (ANTARA) - The Agency for the Assessment and Application of Technology (BPPT) pressed for the government to speed up the development of biofuel as a better alternative to using fossil fuel.

"We have to develop biofuel as a substitute for fossil fuel. We have already conducted several research on biofuel, especially during the past 10 years," BPPT Head Hamam Riza stated here during a webinar on challenges in fossil fuel substitution in the transportation sector held on Thursday.

Riza highlighted Indonesia’s vast biomass potential that can be leveraged for developing biofuel as a replacement to the use of fossil fuels.

In the past century, the global energy demand climbed sharply, with consumption jumping seven folds higher, from that during the 18th century, with fossil fuel being the main contributor.

"More than 90 percent of the energy used in the transportation sector is fossil fuel, and this has shown the high level of dependency on one type of fuel oil. The problem is that it will be susceptible to fluctuations, both on the supply and demand side," he elaborated.

In Indonesia, energy consumption in the transportation sector will continue to rise, more than double as compared to the current consumption.

Industrial sector energy use is projected to become the largest in 2050, at 41 percent, followed by the transportation sector, at 38 percent.

Fossil fuels constitute over 90 percent of the fuel oil used in the transportation sector.

"This has shown that our dependency on fossil fuel is still very high," he stated.

The BPPT head cautioned that the increased import volume of fuel oil would result in a wider state budget deficit and declining foreign exchange reserves.

"Dependency on fossil fuel has caused crude oil imports to increase in order to meet domestic demand," he pointed out.

In 2019, Indonesia had imported 75.3 million barrels of crude oil and 24.7 million kiloliters of fossil fuel.

The high imports of fossil fuel have depleted the state foreign exchange to US$15 billion in 2019, according to the State Statistic Agency (BPS).

"Imports of fossil fuel contributed the largest to the increased deficit of trade balance reported at US$3.2 billion in 2019," Riza stated.

Unggul Priyanto, a BPPT expert in the energy sector, sought the government's support in the fiscal policy for the development of biofuel, as a substitute for fossil fuel.

Priyanto stated that biodiesel was priced higher than diesel oil, so the government's subsidy was required to make it competitive.


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