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Pertamina fuel station (credit: Antara)

Pertamina converting palm oil, residues into biofuel

JAKARTA ( – The state-owned diversified energy company PT Pertamina has started the development of its green refinery, the first in Indonesia, at Refinery Unit (RU) III Plaju, Palembang as part of the government’s drive to reduce dependency on imported fossil fuel and develop greener fuel.

Minister for Energy and Mineral Resources Ignasius Jonan who visited the Biorefinery  on Thursday (Jan. 17) told reporters that the refinery will convert palm oil (kernel) and its residues into biofuel. The end-product could be in the form of green diesel and green aviation jet.

The palm oil residues and wastes can be in the form of empty fruit bunch, palm kernel shells, trunk of the plant, fibre and others.

Minister Jonan was accompanied by Pertamina President Director Nicke Widyawati during the visit.

Minister Jonan appreciates Pertamina for taking the initiative to develop the green refinery because it will help reduce fuel imports as well as at the same time help developing greener fuel.

Jonan said Pertamina will also develop another unit that will convert 100% of CPO into 100% of biodiesel aiming at reducing gas emission and air pollution.

Nicke added that what the Pertamina will do is blending kernel oil with CPO residues. In the past, the residues were thrown away. Now, Pertamina can process the residues at its Residue Catalytic Cracking (RCC) Unit and converting into green fuel.

Nicke said after developing the biofuel at the Plaju refinery plant, Pertamina will do the same at its existing refineries in Balikpapan, Balongan and Cilacap refineries. “So, we will add capacity of those refineries by developing B20 (biofuel) which will be blended with fossil fuel. SO, there are several options,” Nicke said.

The Indonesian government has set a target that the country’s renewable energy will contribute to 23% of the country’s energy mixed in 2025. The utilization of renewable energy is applied in electricity and transportation sector.

Currently, the contribution of renewable energy to the country’s energy mixed is still below 10% although Indonesia is blessed with renewable energy resources.



The government has been over the past few years struggling with the implementation of mandatory blending of biofuel into its diesel fuel, called biodiesel.

In September 2013, it began the mandatory blending of 10% of biofuel into diesel fuel (B10). In November 2015, it launched the implementation of B-15, in which in every litre of diesel fuel, 15% of it is comprised of biofuel.

To realize the policy, the government planned to absorb 5.3 million kiloliters of biodiesel or equivalent to 4.8 million tons of Crude Palm Oil (CPO) in the following year.

Despite the implementation of B15 has not been smooth, the government on Sept 1, 2018 has begun the implementation of B20. The B20 program applies to fuel distributor in this case fuel station, both the holder of public service obligation (PSO) companies and non-PSO, which distribute fuels to the industrial sector.

The mandatory use of B20 is part of the government’s efforts to reduce dependence on fuel import as well as reducing the current account deficit.

Under the program, Pertamina buys fatty acid methyl este (FAME) from palm oil producers. The government has set a price of Rp6000 per litre of FAME, which is considered quite attractive.

Written by Roffie Kurniawan (email:


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