Singapore Firm to Put $100m Into Jatropha

Singapore-based Mother Earth Plantations Pte. Ltd., through its Indonesian subsidiary PT Buana Ibunda, will invest $100 million to develop jatropha plantations and a refinery in West Timor, East Nusa Tenggara Province, which it says will be able to produce up to 21 million barrels of biodiesel a year by 2013.

Speaking on Tuesday on the sidelines of the 5th World Islamic Economic Forum in Jakarta, Roland A. Jansen, Mother Earth’s president, said the investment would take place over four years, and include the construction of a refinery with a processing capacity of 100,000 tons of jatropha seeds per annum by the end of this year.

Jansen said the company would eventually be able to produce some 3 million tons of Jatropha curcas seeds on the marginal land in Kupang that is to be planted as part of the project.

Jatropha curcas, known locally as jarak pagar , is an inedible oil crop primarily used to produce biodiesel. It is estimated that Indonesia has the capacity to produce 2.9 million kiloliters of biodiesel a year and 215,000 kiloliters of bioethanol per year.

However, Paulus Tjakrawan, the secretary-general of the Indonesian Biofuel Producers Association, or Aprobi, said he was no longer so sure about the potential of jatropha-based biofuel, saying it was now unattractive to buyers. Biofuel producers have repeatedly complained that they suffer losses of an average of Rp 610 a liter on sales of biodiesel and bioethanol to Pertamina as the prices are set based on the crude oil price, which collapsed last year.

The government started pushing jatropha oil as an alternative energy source four years ago, with President Susilo Bambang Yudhoyono issuing a decree on the subject in 2006. Under the scheme, three state firms were to buy the jatropha seeds for processing from farmers, who were encouraged to set aside vast areas for growing the feedstock. But the companies never did make the anticipated purchases, mainly because they had their own jatropha plantations, the output of which already exceeded the production capacity of the existing refineries. The jatropha project has now ground to a halt, although the government has yet to admit as much.

The energy mix is currently dominated by petroleum, accounting for 51.6 percent of the energy consumed in Indonesia. This information from here