Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

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

If carried out, the B40 mandate could increase biodiesel usage to up to 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 finished in December, so that full execution of B40 might be performed in 2025, » energy ministry senior official Eniya Listiani Dewi said in a statement on Tuesday.

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

« However we will require more raw products to satisfy B40 demand, » Ernest Gunawan, the secretary general of APROBI told Reuters on Wednesday.

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

Indonesia’s most significant palm oil association GAPKI stated a decline in exports implied there would be enough raw materials to supply the B40 mandate for now.

But the industry would need to assess « which one would be better », GAPKI chairman Eddy Martono stated, describing the possibility a boost in exports would make supplying the domestic market less feasible.

Indonesia’s palm oil output is estimated to reach 54.4 million heaps in 2024, a 2.26% boost from last year, while are expected to decrease by 2.47% to 29.5 million lots as domestic intake increased, driven by biodiesel mandate.

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