Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s biggest 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 executed, the B40 required could increase biodiesel intake to as much as 16 million kilolitres (KL) next year, the ministry said, from 13 million KL approximated to be consumed in 2024.

“We hope the trials might be ended up in December, so that full implementation of B40 could be performed in 2025,” energy ministry senior official Eniya Listiani Dewi said in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) said the market had the capacity to meet B40 need, with set up capability anticipated to to 20 million KL yearly next year from 18 million KL now.

“However we will require more raw products to meet 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 lots required this year, he added.

Indonesia’s greatest palm oil association GAPKI said a decrease in exports meant there would be sufficient raw products to provide the B40 mandate in the meantime.

But the market would need to assess “which one would be better”, GAPKI chairman Eddy Martono said, referring to the possibility a boost in exports would make supplying the domestic market less viable.

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

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