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 combined into biodiesel next year, the energy ministry stated.

If carried out, the B40 mandate might increase biodiesel usage to approximately 16 million kilolitres (KL) next year, the ministry said, from 13 million KL estimated to be consumed in 2024.

«We hope the trials could be finished in December, so that complete execution of B40 could be brought out in 2025,» energy ministry senior official Eniya Listiani Dewi said in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) said the industry had the capacity to meet B40 need, with installed capability anticipated to increase to 20 million KL every year next year from 18 million KL now.

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

The biodiesel market would need 13.9 million metric loads of unrefined palm oil to produce 16 million next year, from the approximated 11 million lots needed this year, he included.

Indonesia’s biggest palm oil association GAPKI stated a decline in exports indicated there would be sufficient raw materials 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 exports would make providing the domestic market less viable.

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

The ministry had actually checked the biodiesel, blended with 40% of palm oil, on a train for the first time previously this week, while preparing to test 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)