Indonesia Plans Increase In Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) - Indonesia, the world's biggest palm oil producer, 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 stated.


If implemented, the B40 mandate might increase biodiesel consumption 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 might be completed in December, so that complete implementation of B40 might be carried out in 2025," energy ministry senior main Eniya Listiani Dewi said in a statement on Tuesday.


The Indonesian Biofuel Producers Association (APROBI) stated the market had the capacity to satisfy B40 need, with installed capacity expected to to 20 million KL every year next year from 18 million KL now.


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


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


Indonesia's biggest palm oil association GAPKI stated a decrease in exports meant there would be enough raw products to supply the B40 mandate in the meantime.


But the industry 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 viable.


Indonesia's palm oil output is approximated to reach 54.4 million loads in 2024, a 2.26% increase from last year, while exports are expected to decline by 2.47% to 29.5 million heaps as domestic intake rose, driven by biodiesel required.


The ministry had actually checked the biodiesel, blended with 40% of palm oil, on a train for the very first time earlier this week, while preparing to check the B40 mix on agriculture machinery, 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)