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 combined into biodiesel next year, the energy ministry stated.

If carried out, the B40 mandate could 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 might be finished in December, so that complete execution of B40 might be brought out in 2025,” energy ministry senior main Eniya Listiani Dewi said in a statement on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) said the market had the capability to satisfy B40 need, with set up capability expected to rise to 20 million KL every year 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 tons of crude palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million loads needed this year, he included.

Indonesia’s most significant palm oil association GAPKI stated a decline in exports indicated there would suffice raw materials to provide the B40 for now.

But the market would require to examine “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 approximated to reach 54.4 million lots 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 consumption increased, driven by biodiesel mandate.

The ministry had checked the biodiesel, combined with 40% of palm oil, on a train for the very first time earlier this week, 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)