Indonesia to regulate exports of palm kernel shells

Government says shells are necessary for operation of more biomass power plants.

Indonesia could limit export of palm kernel shells to ensure supplies of the biomass material used as the power source for biomass plants that generate electricity. The world’s largest palm oil producer said many renewable energy developers are reporting an interest in building power plants running on palm kernel shells.

PT PLN’s construction director Nasri Sebayang said these developers are concerned over supplies of palm kernel shells since many local palm kernel producers prefer to sell their shells overseas. Nasri said the government should consider regulating palm oil producers because of this.

“If we can guarantee the supply of palm shells, I can assure you that many investors would be keen to start constructing biomass power plants,” he said.

Palm kernel shells are a key biomass material and have the potential to replace fossil fuels in the future, said Nasri.

Last year, the government urged developers to build as many biomass power plants as possible to replace fuel-based power plants. It issued a ministerial regulation in 2012 to increase the price of electricity produced by biomass power plants in the hope that palm oil producers in the country would sell palm kernel shells domestically rather than abroad.