Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s greatest palm oil manufacturer, 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 said.

If implemented, the B40 required could increase biodiesel intake to approximately 16 million kilolitres (KL) next year, the ministry said, from 13 million KL approximated to be consumed in 2024.

“We hope the trials could be ended up in December, so that full implementation of B40 could be performed in 2025,” senior main Eniya Listiani Dewi stated in a statement on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) stated the market had the capability to satisfy B40 demand, with installed capacity anticipated to increase to 20 million KL annually 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 told Reuters on Wednesday.

The biodiesel industry would require 13.9 million metric lots of crude palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million lots needed this year, he included.

Indonesia’s biggest palm oil association GAPKI said a decrease in exports indicated there would be adequate basic materials to supply the B40 required in the meantime.

But the market would require to evaluate “which one would be more valuable”, GAPKI chairman Eddy Martono stated, 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 anticipated to decline by 2.47% to 29.5 million loads as domestic usage 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 planning 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)