CPO biodiesel to help lower state expenditure by US$2.43 bln

CPO biodiesel to help lower state expenditure by US$2.43 bln

Photo document a resident shows palm kernel which has been sorted in Rantau Way, Rokan Hulu, Riau, Sumatra. (ANTARA/Wahyu Putro A.)

Jakarta (ANTARA News) - The use of crude palm oil (CPO) as biodiesel fuel can reduce the state expenditure by US$2.43 billion, according to the Indonesian Chamber of Commerce and Industry (Kadin).

"The state expenditure could be economized by using CPO as biodiesel since the state will reduce its imports of diesel oil by 28.6 percent," Kadin Chairman for Agribusiness and Food Affairs Franky O. Widjaja stated here on Thursday.

The other benefit derived from the use of CPO as biodiesel fuel is that the country will receive exit taxes worth some Rp25 trillion per annum.

Besides this, the government will also receive Rp10 trillion in land and building taxes, Rp10 trillion in corporate tax, and Rp4 trillion in motor vehicle police registration number (STNK) tax.

"The other income it could contribute directly or indirectly includes an average of 200 cubic meters of palm oil logs per hectare that can be harvested at the recycle age," he added.

Currently, Indonesia has 10 million hectares of palm oil plantations. Of the total, some eight percent are managed by state companies, 49 percent by private CPO industries, and the remaining percentage belongs to small farmers.

Franky pointed out that the utilization of CPO as an energy source is yet to reach its optimal level as the people, oil palm farmers in particular, still lack the understanding of processing CPO into a renewable energy product.

"Oil palm plantations could serve as a regional and international economic power in the agricultural sector through various innovations and breakthroughs by the government and the private sector," he added.