The Indonesian government is preparing to build eight biodiesel factories in the country in a move to provide an alternative to expensive fossil-based fuels, the Jakarta Post reported on Thursday.
Industry Minister Fahmi Idris was quoted by the newspaper as saying here on Wednesday that each of the factories would be built with a production capacity of 3,000 tons to 6,000 tons per year.
However, he said his ministry has not decided on the locations for the factories.
"We are in the process of selecting the right locations for the eight factories. We have offered the plan to all local administrations in the country," he said at a seminar in Jakarta.
He said the determining factors in selecting the locations would include close proximity to oil palm plantations, or other commodities such as cassava and sugarcane that can be used for biodiesel production.
"The construction of the planned factories, which are estimated to cost about 60 billion rupiahs (about 649,000 U.S. dollars), will be financed from the 2006 national budget."
Part of the funds, Fahmi said, would be used for operating the factories, and they would be handed over to local administrations within a year.
"In operating the factories, the local administrations will be helped by their enterprises, local cooperatives or other business units," he said.
He said that private companies would be invited to construct the factories.
Separately, State Minister for Research and Technology Kusmayanto Kadiman said that he has provided the results of his research on the right locations for factories to Fahmi.
"If a factory will be built in West Sumatra, for example, then palm oil can be used for biodiesel production," he said.
"The best locations for the factories are marginal areas so that their operations can help the areas to grow," he added.
A concerted movement for the use of biodiesel has emerged in the wake of skyrocketing oil prices. Biofuel is renewable and based on such crops as castor-oil plants, oil palm, cassava and sugarcane, which can all be grown in the country.
Most importantly, biofuel production is highly labor intensive and the renewable fuel burns cleaner.
Energy and Mineral Resources Minister Purnomo Yusgiantoro has announced earlier a crash program to build 11 biodiesel plants, with production targets of 187 million liters next year and 1.3 billion liters by 2010, or equivalent to 3 percent of the country's total fuel consumption of 41 million kiloliters in 2005.