Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s greatest palm oil producer, is checking 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 executed, the B40 mandate could increase biodiesel usage to up to 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 ended up in December, so that complete application of B40 could be brought out in 2025,” energy ministry senior official Eniya Listiani Dewi said in a statement on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) stated the market had the capacity to meet B40 demand, with set up capability expected to rise to 20 million KL every year next year from 18 million KL now.

“However we will require more raw products to satisfy B40 demand,” Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.

The biodiesel market would require 13.9 million metric lots of unrefined 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 decline in exports suggested there would suffice raw to supply the B40 mandate in the meantime.

But the market would require to assess “which one would be better”, GAPKI chairman Eddy Martono said, describing the possibility a boost in exports would make supplying the domestic market less feasible.

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 decrease by 2.47% to 29.5 million loads as domestic usage increased, driven by biodiesel required.

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