Palm Oil Boom in Indonesia : From Plantation to Downstream Products and Biodiesel

Indonesia has been the biggest producer of palm oil (PO) in the world since 2005. The total production in 2007 was 17.0 and 1.9 million tons of crude palm oil (CPO) and crude palm kernel oil (CPKO), respectively. More than 70% of the CPO was exported and 87% of the domestic consumption was used for food. The production and subsequent refining and fractionation of CPO and CPKO generated biomass by-products that consists of trunk, frond, empty fruit bunch (EFB), fiber, shell, and palm kernel meal (PKM), and discharged wastes of palm oil mill effluent (POME) as well as palm fatty acid distillate (PFAD). The amount of by-products and wastes produced has been growing very rapidly and efforts to diversify and improve their utilization are a great challenge. As claimed in many research reports, the by-products and wastes could be potentially utilized as sources of energy, animal feed, chemicals, paper pulp, advanced materials, medicines and food ingredients. A more important role may be played by PO as the Indonesian Government took further steps in 2006 to become the world's largest producer of biodiesel. As a starting point, Presidential Instruction No. 1/2006 for the Production and Use of Biofuel as Alternative Fuel was issued in January 2006. Responding to this Presidential Instruction, at least 15 companies are planning to establish new larger biodiesel refineries to enhance the currently produced 82.5 million L of biodiesel. It is planned to start production in 2008/2009 with two new refineries that have a total capacity of ca. 1,600 million L/year.