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 stated.

If executed, the B40 required could increase biodiesel usage to up to 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL approximated to be consumed in 2024.

«We hope the trials could be ended up in December, so that full execution of B40 might be brought out in 2025,» energy ministry senior main Eniya stated in a statement on Tuesday.

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

«However we will require more raw products to satisfy B40 need,» Ernest Gunawan, the secretary general of APROBI told Reuters on Wednesday.

The biodiesel market would need 13.9 million metric tons of unrefined palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million lots required this year, he included.

Indonesia’s greatest palm oil association GAPKI said a decrease in exports indicated there would be sufficient raw products to supply the B40 mandate for now.

But the industry would need to evaluate «which one would be better», GAPKI chairman Eddy Martono stated, describing the possibility a boost in exports would make supplying the domestic market less feasible.

Indonesia’s palm oil output is estimated to reach 54.4 million tons 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 intake rose, driven by biodiesel mandate.

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