Indonesia Plans Increase In Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) - Indonesia, the world's most significant palm oil producer, is checking fuel with a view to increasing to 40% from 35% the share of palm-oil mixed 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 could be ended up in December, so that complete application of B40 might be carried out in 2025," energy ministry senior official Eniya Listiani Dewi stated in a declaration on Tuesday.


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


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


The biodiesel market would require 13.9 million metric lots of crude palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million heaps required this year, he added.


Indonesia's greatest palm oil association GAPKI said a decline in exports implied there would suffice raw materials to provide the B40 mandate for now.


But the market would need to evaluate "which one would be more important", Eddy Martono said, referring to the possibility a boost in exports would make supplying the domestic market less feasible.


Indonesia's palm oil output is estimated to reach 54.4 million tons in 2024, a 2.26% boost from in 2015, while exports are anticipated to decline by 2.47% to 29.5 million lots as domestic intake rose, driven by biodiesel mandate.


The ministry had actually tested the biodiesel, blended with 40% of palm oil, on a train for the first time earlier today, while planning to check 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)