Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

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

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

« We hope the trials might be completed in December, so that complete execution of B40 could be carried out in 2025, » energy ministry senior official Eniya Listiani Dewi stated in a statement on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) stated the industry had the capacity to meet B40 need, with set up capability expected to increase to 20 million KL each year next year from 18 million KL now.

« However we will need more raw materials to satisfy B40 demand, » Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.

The biodiesel industry would need 13.9 million metric tons 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 decline in exports implied there would be adequate raw products to provide the B40 mandate in the meantime.

But the market would need to evaluate « which one would be more important », GAPKI chairman Eddy Martono stated, referring to the a boost in exports would make providing the domestic market less practical.

Indonesia’s palm oil output is approximated to reach 54.4 million loads in 2024, a 2.26% boost from last year, while exports are expected to decrease by 2.47% to 29.5 million lots as domestic intake increased, driven by biodiesel mandate.

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