Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s most significant 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 said.

If executed, the B40 mandate might increase biodiesel consumption to up to 16 million kilolitres (KL) next year, the ministry said, from 13 million KL estimated to be consumed in 2024.

“We hope the trials might be completed in December, so that complete execution of B40 might be carried out in 2025,” energy ministry senior main Eniya Listiani Dewi stated in a statement on Tuesday.

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

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

The biodiesel industry would require 13.9 million metric lots of unrefined palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million lots required this year, he added.

Indonesia’s greatest palm oil association GAPKI said a decline in exports suggested there would suffice raw materials to supply the B40 mandate for now.

But the market would require to assess “which one would be better”, GAPKI chairman Eddy Martono said, referring to 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 loads in 2024, a 2.26% increase from in 2015, while exports are anticipated to decline by 2.47% to 29.5 million loads as domestic intake increased, driven by biodiesel required.

The ministry had actually checked the biodiesel, blended with 40% of palm oil, on a train for the first time earlier this week, while to test the B40 mix on farming equipment, 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)