Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s biggest 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 said.

If carried out, the B40 required might increase biodiesel intake to up to 16 million kilolitres (KL) next year, the ministry said, from 13 million KL estimated to be consumed in 2024.

“We hope the trials could be ended up in December, so that full implementation 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 industry had the capability to meet B40 demand, with set up capability expected to increase to 20 million KL each 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 tons of oil to produce 16 million KL biodiesel next year, from the estimated 11 million heaps required this year, he added.

Indonesia’s most significant palm oil association GAPKI said a decline in exports meant there would be enough raw materials to provide the B40 required for now.

But the market would require to assess “which one would be more important”, GAPKI chairman Eddy Martono stated, referring to the possibility an increase in exports would make supplying the domestic market less viable.

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 expected to decrease by 2.47% to 29.5 million loads as domestic intake rose, driven by biodiesel mandate.

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