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Palm oil biodiesel makes volatile bet for Indonesia's Pertamina

Cost and ESG risks threaten state energy company's low-carbon pivot

Indonesia and Malaysia, the world's top palm oil producers, face criticism over the industry's environmental cost.   © Reuters

JAKARTA -- Indonesian state energy company Pertamina has committed to palm oil biofuel as it follows the global shift away from fossil fuels, but high costs and international pressure over the industry's deforestation show this approach carries its own risks.

President Director Nicke Widyawati announced the oil and gas group's plans for renewable energy earlier this month, saying the transition to bioenergy "can reduce carbon monoxide gas and hydrocarbon gas emissions by between 20% and 50%."

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