Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s most significant palm oil producer, is evaluating fuel with a view to increasing to 40% from 35% the share of palm-oil mixed into biodiesel next year, the energy ministry stated.

If carried out, the B40 required could 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 could be completed in December, so that full implementation of B40 could be brought 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 demand, with installed capacity expected to rise to 20 million KL every year next year from 18 million KL now.

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

The biodiesel industry would need 13.9 million metric loads 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 biggest palm oil association GAPKI stated a decrease in exports indicated there would suffice raw products to provide the B40 required in the meantime.

But the market would need to assess “which one would be more valuable”, GAPKI chairman Eddy Martono said, referring to the possibility an increase in would make providing the domestic market less feasible.

Indonesia’s palm oil output is approximated to reach 54.4 million heaps in 2024, a 2.26% increase from in 2015, while exports are expected to decline by 2.47% to 29.5 million loads as domestic usage rose, driven by biodiesel mandate.

The ministry had actually tested the biodiesel, mixed with 40% of palm oil, on a train for the very first time earlier today, while preparing to evaluate the B40 mix on farming machinery, 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)