Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s greatest palm oil manufacturer, is checking 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 carried out, the B40 mandate could increase biodiesel usage to up to 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL estimated to be consumed in 2024.

“We hope the trials might be completed in December, so that complete implementation of B40 might be performed in 2025,” energy ministry senior main Eniya Listiani Dewi stated in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) stated the market had the capability to fulfill B40 need, with set up capacity anticipated to increase to 20 million KL annually 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 told Reuters on Wednesday.

The biodiesel industry would need 13.9 million metric lots of unrefined palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million tons required this year, he included.

Indonesia’s most significant palm oil association GAPKI said a decrease in exports indicated there would be adequate raw products to supply the B40 mandate in the meantime.

But the market would require to examine “which one would be better”, Eddy Martono stated, describing 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 heaps in 2024, a 2.26% increase from last year, while exports are anticipated to decline by 2.47% to 29.5 million loads as domestic usage rose, driven by biodiesel mandate.

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