Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s greatest palm oil manufacturer, 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 required might increase biodiesel usage to up to 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL approximated to be consumed in 2024.

“We hope the trials might be ended up in December, so that complete execution of B40 could be performed in 2025,” energy ministry Eniya Listiani Dewi stated in a statement on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) stated the industry had the capacity to satisfy B40 need, with set up capability expected to increase to 20 million KL annually next year from 18 million KL now.

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

The biodiesel market would require 13.9 million metric lots of crude palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million heaps needed this year, he added.

Indonesia’s greatest palm oil association GAPKI stated a decrease in exports implied there would be sufficient basic materials to supply the B40 mandate for now.

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

Indonesia’s palm oil output is estimated to reach 54.4 million heaps in 2024, a 2.26% increase from in 2015, while exports are anticipated to decrease by 2.47% to 29.5 million tons as domestic consumption rose, driven by biodiesel required.

The ministry had actually evaluated the biodiesel, mixed with 40% of palm oil, on a train for the first time previously this week, while preparing to check the B40 mix on agriculture 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)