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 to 40% from 35% the share of palm-oil mixed into biodiesel next year, the energy ministry said.

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

“We hope the trials could be completed in December, so that full execution of B40 could be performed in 2025,” energy ministry senior main Eniya Listiani Dewi said in a declaration on Tuesday.

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

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

The biodiesel industry would need 13.9 million metric lots of crude palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million loads needed this year, he added.

Indonesia’s biggest palm oil association GAPKI said a decrease in exports suggested there would suffice raw products to supply the B40 mandate for now.

But the industry would need to examine “which one would be better”, GAPKI chairman Eddy Martono said, describing the possibility an increase in exports would make supplying 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 anticipated to decrease by 2.47% to 29.5 million tons as domestic consumption rose, driven by biodiesel mandate.

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