Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025
JAKARTA, July 24 (Reuters) - Indonesia, the world's most significant palm oil manufacturer, is evaluating fuel with a view to increasing to 40% from 35% the share of palm-oil combined into biodiesel next year, the energy ministry stated.
If executed, the B40 mandate could intake to as much as 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL approximated to be consumed in 2024.
"We hope the trials might be finished in December, so that full execution of B40 could be performed in 2025," energy ministry senior main Eniya Listiani Dewi said in a statement on Tuesday.
The Indonesian Biofuel Producers Association (APROBI) said the market had the capability to meet B40 need, with installed capacity expected to rise to 20 million KL annually next year from 18 million KL now.
"However we will require more raw products to fulfill B40 need," Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.
The biodiesel market would need 13.9 million metric tons of crude palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million loads needed this year, he added.
Indonesia's biggest palm oil association GAPKI said a decline in exports indicated there would be enough raw products to provide the B40 required in the meantime.
But the market would need to examine "which one would be more important", GAPKI chairman Eddy Martono said, describing the possibility an increase in exports would make supplying 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 in 2015, while exports are anticipated to decline by 2.47% to 29.5 million heaps as domestic usage increased, driven by biodiesel mandate.
The ministry had actually checked the biodiesel, combined with 40% of palm oil, on a train for the very first time earlier this week, while preparing to test the B40 mix on farming machinery, 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)