Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s most significant 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 mandate might increase biodiesel intake 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 could be completed in December, so that complete execution of B40 could be brought out in 2025,” energy ministry senior official Eniya Listiani Dewi said in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) said the market had the capacity to fulfill B40 demand, with installed capacity expected to rise to 20 million KL every year next year from 18 million KL now.

“However we will require more basic materials to satisfy B40 need,” Ernest Gunawan, the secretary general of APROBI informed 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 heaps needed this year, he included.

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

But the industry would need to assess “which one would be better”, GAPKI chairman Eddy Martono said, describing the possibility a boost in exports would make supplying the domestic market less viable.

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

The ministry had actually tested the biodiesel, combined with 40% of palm oil, on a train for the very first time previously today, while planning to evaluate the B40 mix on agriculture equipment, 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)