Withering before full bloom?: Bioenergy development in Southeast Asia

Countries in Southeast Asia have been producing bioenergy since 2005. With the exception of bioethanol production in Thailand, most initiatives responded to rising crude oil prices and the increasing domestic fuel subsidies. This paper reviews the development of the bioenergy sector in Indonesia, Malaysia, the Philippines and Thailand. The paper finds that targets set by the four countries have not been met, although in Thailand and the Philippines the use of biofuels has been growing steadily. In Indonesia, production has increased, but the use of biodiesel is low. In Malaysia, both production and use of biodiesel have declined. Thailand leads the region in bioethanol production. The Philippines relies on imports to provide feedstock to produce bioethanol. Indonesia did not produce bioethanol after 2010. Malaysia produces no first-generation bioethanol, although there are plans to develop second-generation bioethanol. There are at least two reasons for low domestic consumption of biofuels. First, the rise in feedstock prices means production of biofuels is less competitive. Second, rising crude oil prices prompted most countries to maintain or increase fossil fuel subsidies to preserve political and social stability. While there is concern that production of biofuels may threaten food security, this does not seem to be a major issue, at least in the near future. However, international civil society groups are concerned with the environmental and social impacts of expanding oil palm plantations and are increasingly critical of biofuel production in Southeast Asia.