Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s biggest palm oil producer, is testing fuel with a view to increasing to 40% from 35% the share of palm-oil blended into biodiesel next year, the energy ministry stated.

If executed, the B40 mandate might increase biodiesel usage to as much as 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL estimated to be consumed in 2024.

“We hope the trials could be ended up in December, so that complete implementation of B40 could be performed in 2025,” energy ministry senior main Eniya Listiani Dewi said in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) stated the market had the capacity to meet B40 demand, with set up capacity anticipated to increase to 20 million KL each year next year from 18 million KL now.

“However we will require more raw products to meet B40 demand,” Ernest Gunawan, the secretary general of APROBI told Reuters on Wednesday.

The biodiesel industry would need 13.9 million metric lots of crude palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million tons required this year, he included.

Indonesia’s greatest palm oil association GAPKI said a decrease in exports suggested there would suffice basic materials to provide the B40 mandate for now.

But the industry would require to assess “which one would be more important”, Eddy Martono said, referring to the possibility a boost in exports would make providing the domestic market less feasible.

Indonesia’s palm oil output is approximated to reach 54.4 million loads in 2024, a 2.26% boost from in 2015, while exports are anticipated to decrease by 2.47% to 29.5 million lots as domestic usage increased, driven by biodiesel mandate.

The ministry had tested the biodiesel, blended with 40% of palm oil, on a train for the first time previously today, while planning to evaluate the B40 mix on farming machinery, power plants and in the shipping market, it said. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D’Souza and Barbara Lewis)