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 combined into biodiesel next year, the energy ministry said.

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

“We hope the trials might be finished in December, so that full implementation of B40 might be brought out in 2025,” energy ministry senior main Eniya Listiani Dewi said in a statement on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) said the industry had the capability to fulfill B40 demand, with installed capability expected to rise to 20 million KL annually next year from 18 million KL now.

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

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

Indonesia’s greatest palm oil association GAPKI said a decrease in exports implied there would suffice raw products to provide the B40 mandate in the meantime.

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

Indonesia’s palm oil output is estimated 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 tons as domestic usage rose, driven by biodiesel required.

The ministry had actually evaluated the biodiesel, blended with 40% of palm oil, on a train for the very first time earlier today, while planning to check the B40 mix on farming machinery, power plants and in the shipping industry, it said. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D’Souza and Barbara Lewis)