Riding the Hype: The Role of State-Owned Enterprise Elite Actors in the Promotion of Jatropha in Indonesia

Abstract

Within a few years following its ambitious promotion in 2006, the development of jatropha in Indonesia came to a halt. Claimed as a potential solution to problems in energy and poverty, the introduction of jatropha in Indonesia's energy policy had been triggered by the high oil prices in 2005. While studies by biofuel scholars have generally focused on what brought the end of the "miracle crop" hype by underlining various technical problems and the absence of market structure as the cause of its failure, few have examined jatropha as part of a policy-making trajectory, which began with, and was influenced by, the development narratives disseminated by individual actors. This article sheds light on the role of elite actors in the making of biofuel energy policy in Indonesia. Taking the case of the promotion of jatropha in 2005-2007, the article illustrates the role of the director of Indonesia's leading sugar state-owned enterprise (SOE), Rajawali Nusantara Indonesia (RNI), whose decision in promoting jatropha became influential in forwarding its narratives into the national energy and development policy in 2006. In order to discover why a specific elite actor decided to promote jatropha, the article relies on data, including the SOE's documents and interviews with key actor(s). The analysis is conducted using an actor-oriented approach, which underlines the discrepancy between the ideals and the operational practice of developmental goals.

Is there life after hype for Jatropha? Exploring growth and yield in Indonesia

“…This has been further compounded by interests in energy security and increasing oil prices, necessitating governments to consider alternative fuel sources with lower security risks (Simandjuntak, 2014). The response has been an increase in public, political, and scientific concern, driven primarily by a desire to reduce CO 2 emissions and reduce the dependency on fossil fuels (Verrastro and Ladislaw, 2007).…”

“…This was most certainly evident in Indonesia (Affif. 2014;Simandjuntak, 2014). Vel et al (2013) argues that policies are often influenced by a network of powerful entrepreneurs who influence or manipulate the policy process for personal gain.…”

“…Technology push often starts with the development of an innovative technology and applying it to a product for marketing (Boehme, 1986;Bullinger, 1994;Brem and Voigt, 2009). The jatropha technology push was not only supported but as much invented by academia (Afiff, 2014), state-owned enterprise elite (Simandjuntak, 2014), government agencies, private companies, and engineering research centres (Widodo and Rahmarestia, 2008). The focus was primarily on research and development to improve the processing techniques, jatropha biodiesel properties and performance testing, developing standardisation, and engineering (see review in Koh and Ghazi, 2011;Atabani et al, 2013).…”

“…al., 2013(Vel et. al., , 2014aAfiff, 2014;Simandjuntak, 2014;Widjaja, 2014;Gunawan, 2014;Van Rooijen, 2014). Vel et.…”

“…The jatropha hype this time was more substantial as there were claims by governments, universities, and private companies and NGOs (Vel et al, 2013;Afiff, 2014;Simandjuntak, 2014) that jatropha was the miracle plant, or as some put it, green gold. Once again the price of crude oil plummeted and when combined with the low and inconsistent yields, it was obvious that there was no financial advantage in cultivating jatropha for biodiesel (Nielsen et al, 2013).…”