Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

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

If executed, the B40 mandate could increase biodiesel usage to approximately 16 million kilolitres (KL) next year, the ministry said, from 13 million KL approximated to be consumed in 2024.

“We hope the trials could be completed in December, so that complete application 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 satisfy B40 demand, with installed capability expected to rise to 20 million KL each year next year from 18 million KL now.

“However we will need more basic materials to satisfy B40 demand,” Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.

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

Indonesia’s biggest palm oil association GAPKI said a decline in exports meant there would suffice basic to supply the B40 required in the meantime.

But the industry would require to evaluate “which one would be better”, GAPKI chairman Eddy Martono said, describing the possibility an increase in exports would make providing the domestic market less feasible.

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

The ministry had checked the biodiesel, combined with 40% of palm oil, on a train for the first time previously today, while preparing to evaluate the B40 mix on farming 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)