Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s biggest 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 might increase biodiesel usage to as much as 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 finished in December, so that complete application of B40 might be performed in 2025,” energy ministry senior main Eniya Listiani Dewi stated in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) stated the market had the capacity to fulfill 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 materials 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 loads required this year, he included.

Indonesia’s biggest palm oil association GAPKI stated a decrease in exports implied there would be sufficient raw materials to supply the B40 required for now.

But the industry would need to examine “which one would be more valuable”, GAPKI chairman Eddy Martono said, 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 heaps in 2024, a 2.26% boost from last year, while exports are anticipated to decline by 2.47% to 29.5 million loads as domestic intake 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 today, while preparing to evaluate the B40 mix on farming equipment, power plants and in the shipping industry, it said. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Widianto; Editing by John Mair, Savio D’Souza and Barbara Lewis)