Indonesia Plans Increase In Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) - Indonesia, the greatest palm oil producer, 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 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 could be completed in December, so that full execution of B40 could be performed in 2025," energy ministry senior official Eniya Listiani Dewi stated in a statement on Tuesday.


The Indonesian Biofuel Producers Association (APROBI) said the market had the capability to meet B40 need, with installed capability anticipated to rise to 20 million KL every year next year from 18 million KL now.


"However we will need more raw products to meet B40 need," Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.


The biodiesel industry would need 13.9 million metric lots of unrefined palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million tons needed this year, he added.


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


But the industry would require to assess "which one would be better", GAPKI chairman Eddy Martono stated, describing the possibility an increase in exports would make providing the domestic market less practical.


Indonesia's palm oil output is approximated to reach 54.4 million lots in 2024, a 2.26% boost from last year, 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 evaluated the biodiesel, mixed 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 stated. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D'Souza and Barbara Lewis)