Indonesia conducting feasibility study to evaluate crude palm oil (CPO) as alternative polymer feedstock

23-Feb-15

The Indonesian government is currently conducting a feasibility study to see if crude palm oil (CPO) could be used as an alternative raw material source for the plastics industry, as per thejakartapost.com. This could lead to cost cutting and increased use of renewable materials. Indonesia is the world’s largest CPO producer at a production rate of 31 million tpa. The director for basic chemical industries at the Industry Ministry, M. Khayam, said the country was looking to substitute the use of naphtha-based propylene with CPO-based propylene. The Industry Ministry in cooperation with the Agency for the Assessment and Application of Technology (BPPT), was keeping abreast of the recent technological advances in the industry, allowing it to cut back on costs by sourcing cheaper and renewable materials like CPO. According to ministry data, raw materials make up 80 percent of production costs in the upstream petrochemicals industry, while contributing around 60 percent to costs in the downstream sector. In an effort to reduce the country’s reliance on naphtha as a source material, the director said Rp 25 billion from the 2015 revised state budget was allocated to fund the studies, including for the construction of small test production facilities. Wider implementation of the project is expected to commence in 2016, he added.