Current status of bioenergy development in Indonesia

Jan 2008

Because of the effects of high petroleum and natural gas prices, Indonesia is implementing national policies and legislation to encourage bioenergy production as a means to achieve energy security and self-sufficiency and to reduce reliance on fossil fuel reserves. The growing national and international demand of bioenergy is particular interest to developing countries like Indonesia for seeking opportunities on economic growth and trade. Indonesia has a comparative advantage for bioenergy production because of greater availability of land, favorable climatic conditions for agriculture and lower labor costs. However, Indonesia faces socio-economic and environmental implications affecting the potential to benefit from the increased local and global demand
of bioenergy. The interrelationship between land uses and the competing needs of energy and food security is a key issue in the bioenergy that should be considered. In addition, the effects of large-scale bioenergy production on global commodity prices are a significant trade concern. Bioenergy production may also entail harmful environmental effects such as deforestation and loss of biodiversity. Regulation is required to reduce the negative impacts of large-scale production, as well as to ensure that the most cost effective and highest-energy conversion technologies are used. Given the opportunities and risks, criteria for the sustainable development of the bioenergy industry should be clearly established in both international and national regulatory frameworks.

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