Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s greatest palm oil producer, is checking 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 carried out, the B40 required could increase biodiesel consumption to approximately 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL estimated to be consumed in 2024.

„We hope the trials might be finished in December, so that complete execution of B40 might be brought out in 2025,” energy ministry senior main Eniya Listiani Dewi said in a statement on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) stated the industry had the capability to satisfy B40 need, with set up capacity anticipated to rise to 20 million KL each year next year from 18 million KL now.

„However we will require more basic materials to meet B40 demand,” Ernest Gunawan, the secretary general of APROBI told Reuters on Wednesday.

The biodiesel market would require 13.9 million metric tons of unrefined palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million tons needed this year, he added.

Indonesia’s most significant palm oil association GAPKI said a decrease in exports suggested there would be enough basic materials to supply the B40 mandate in the meantime.

But the industry would require to assess „which one would be better”, GAPKI chairman said, referring to 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 anticipated to decrease by 2.47% to 29.5 million loads as domestic intake increased, 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 machinery, power plants and in the shipping industry, it stated. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D’Souza and Barbara Lewis)