Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s greatest palm oil producer, is evaluating fuel with a view to increasing to 40% from 35% the share of palm-oil blended into biodiesel next year, the energy ministry said.

If carried out, the B40 mandate might increase biodiesel consumption 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 might be completed in December, so that complete execution of B40 might be carried out in 2025,” energy ministry senior main Eniya Listiani Dewi stated in a statement on Tuesday.

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

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

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

Indonesia’s biggest palm oil association GAPKI stated a decrease in exports indicated there would be enough raw products to supply the B40 required for now.

But the industry would require to evaluate „which one would be better”, GAPKI chairman Eddy Martono said, referring to the possibility an increase in exports would make supplying the domestic market less practical.

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

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