Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025
JAKARTA, July 24 (Reuters) - Indonesia, the world's most significant palm oil manufacturer, 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 said.
If implemented, the B40 mandate might increase biodiesel intake to approximately 16 million kilolitres (KL) next year, the ministry said, from 13 million to be consumed in 2024.
"We hope the trials could be finished in December, so that complete implementation of B40 might be performed in 2025," energy ministry senior official Eniya Listiani Dewi stated in a statement on Tuesday.
The Indonesian Biofuel Producers Association (APROBI) said the industry had the capability to satisfy B40 need, with set up capacity anticipated to increase to 20 million KL annually next year from 18 million KL now.
"However we will require more basic materials to satisfy B40 demand," 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 estimated 11 million loads required this year, he added.
Indonesia's greatest palm oil association GAPKI stated a decline in exports indicated there would be adequate basic materials to supply the B40 required in the meantime.
But the market would need to assess "which one would be better", GAPKI chairman Eddy Martono stated, referring to the possibility a boost in exports would make supplying the domestic market less practical.
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 anticipated to decrease by 2.47% to 29.5 million lots as domestic consumption rose, driven by biodiesel mandate.
The ministry had evaluated the biodiesel, combined with 40% of palm oil, on a train for the first time earlier today, while planning to check 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)