Jatropha in Indonesia: From hot to rot for wonder crop

Nick Perry, Jakarta Post 21 Feb 10;

It was dubbed a "miracle" crop by scientists the world over.

In 2007, biofuel enthusiasts were selling it as the answer to the looming energy crisis and human dependence on fossil fuels. As a tough, drought-resistant weed thriving on marginal land and a vast producer of useable oils, jatropha curcus seemed too good to be true.

And in many ways, perhaps it was. Although producing biodiesels from jatropha does not require sacrificing food crops - unlike corn-based ethanol or oil from soybeans - problems with inconsistent yields, production and land allocation saw support for the hardy little plant falter.

With investment and interest drying up, newspaper reports began referring to jatropha as the "wonder to blunder" crop, delaying its progress even further.

Nowhere was this transition from hero to villain more evident than in Indonesia, the nation touted by experts in 2006 as the most likely to grow and produce jatropha-based biodiesels commercially on a large, global scale.

Tony Wood, president director of the P*yry Forestry Industry, said a combination of bad headlines and a lack of investment interest had seen enthusiasm for jatropha crash in 2009, with most major projects in Indonesia put on hold.

"Where previously a range of consultants had been running all over the country looking for potential jatropha areas," Wood said, "suddenly these same people found themselves back on the job market."

At a biofuels convention last year, Wood said Indonesia was the largest potential market for renewable resources in Southeast Asia, but "while people have the ideas and great technology, there is still something missing".

Although admitting that large-scale operations have little chance of developing in the future, Wood stands by his earlier statement that Indonesia is ideal for small-scale jatropha production.

"Jatropha fits the Indonesian model of many small-scale producers quite well and should not be given up on," he said. "Small to medium-sized operations producing biodiesel for local consumption makes much more sense and it is this model that I think we may see in the future."

In 2006, nobody would have believed that growth estimates for the jatropha market in Indonesia would have dropped off so suddenly a few years down the track. A year earlier, Indonesia - Southeast Asia's biggest oil producer and user - was facing renewed pressure from the international community to reduce its carbon footprint and make attempts to mitigate the impacts of climate change.

With global oil prices skyrocketing, President Susilo Bambang Yudhoyono was forced to cut the oil subsidy in October 2005, sparking protests nationwide.

Indonesian scientists working in the biofuels industry immediately recognized the possibilities jatropha had in store for the archipelago. With 22 million hectares of unused, marginal and critical land, varied climate, massive labor market and diverse investment channels, the potential for Indonesia was enormous.

For Yudhoyono, the chance to invest in a renewable "green" energy could not have come at a better time.

The government announced plans to spend US$22 billion by 2010 to promote biofuels, with presidential regulations promising the inclusion of biofuels in the primary energy sector by 2025. Research into jatropha skyrocketed, as did unprecedented interest from the business sector, which dreamed of the profits to be made from cashing in on this wonder crop and developing an export market for its products.

With expectations for jatropha at an all-time high, and with the international biofuels sector looking toward Indonesia, support was needed at home. To generate publicity for the campaign, National Geographic Indonesia collaborated with Mitsubishi to power a car from East Nusa Tenggara to Jakarta entirely on jatropha-based biodiesel.

"In 2006, the government research institute *BPPT* had ambitious plans for jatropha," Prof. Dr. Erliza Hambali, director of the Bandung Institute of Technology (ITB) Bioenergy Research Center, said at a conference last year. "They estimated that by 2010 there would be around 1.5 million hectares of Indonesian land cultivated for jatropha."

Government officials and business investors were fascinated by jatropha's unique ability to adapt to its environment, with very little assistance, and produce 30 to 40 percent oil content from its seeds. Virtually the entire plant is used, with the oil processed for biofuels, the trunk manufactured for fertilizer and the by-product forming glycerine for organic soaps.

However, by April 2008, only 120,000 hectares of land had been cultivated for jatropha across Indonesia. With global oil prices dropping significantly in 2009, and with the onset of the financial crisis, business groups and the government lost interest, or at least the economic desire, to continue pushing for the advancement of alternative fuel sources.

As Brazil, Europe and the Philippines surged ahead in biofuel development throughout 2009, Indonesia was left with a sector lacking the profits, structure and political will to survive.

Instead, those interested in continuing the development of jatropha were left struggling against bureaucratic, convoluted land-ownership laws, among other problems.

While land may be abundant in Indonesia, the procedure behind gaining the rights and certification to develop biofuels is incredibly long and complicated, often dragging into years.

"One of the major problems facing the expansion of the jatropha market is land availability", Erliza said. "Sure, there is a lot of empty land in Indonesia, but much of it is already owned and certified, even if it is unused."

A key ongoing problem is the lack of clear vision from the government over their promotion of renewable energies, according to Maxensius Tri Sambodo, an economic researcher at the Indonesian Institute of Sciences (LIPI). While the government has agreed biofuels can improve economic stability, create jobs and reduce poverty and dependence on fossil fuels, it remains reluctant to fully support the industry after the initial setbacks.

Biofuel campaigners argue the direction of government policy still favors fossil fuels. The Yudhoyono administration has given more than Rp 120 trillion in subsidies to the fossil fuels industry in recent years, but left the biofuels sector waiting for promised funding.

"Price is the key," Maxensius said. "The government still provides subsidies for fossil fuels. Studies also show that there is lack of coordination between central and local governments in promoting biofuels."

By far the biggest obstacle standing in the way of jatropha development in Indonesia is inconsistent yields. While Air New Zealand and Continental Airlines have powered test flights run entirely on jatropha biofuels, and thousands of homes across Belgium are powered on jatropha purchased from Thailand, Indonesian scientists have been battling uneven ripening times and variations in seeds and oil content.

"What it all boils down to I think is that while jatropha remains a strong potential crop for Indonesia," Wood said, "right now few people are achieving even close to the yields required to make projects economically attractive on a large scale. I believe that this will come as some good work is being done, but it will take time."

The presence of an already well-established and highly lucrative palm oil industry bringing in big dollars has made it difficult to convince farmers in Indonesia to harvest jatropha.

With low profits, a virtually nonexistent export market and scarce infrastructure for producing the biofuel, rural Indonesia's confidence in the product is not high.

The government is currently dealing with the commercial side of jatropha, Wood said, so that companies investing now should find a stable situation by the time plantations start producing even yields.

Dr. Endang Warsiki, coordinator of the Research Center for Jatropha Research and Development in Indonesia, said the focus right now is on ongoing collaborative research with the government and with laboratories in Japan and Singapore.

"Indonesia has been a research partner in jatropha from the beginning," Endang said. "Currently, our goal *is* to get high yields. The funding mostly comes from the government."