Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025
JAKARTA, July 24 (Reuters) - Indonesia, the world's most significant palm oil producer, is testing 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 carried out, the B40 mandate might increase biodiesel usage to approximately 16 million kilolitres (KL) next year, the ministry said, from 13 million KL approximated to be consumed in 2024.
"We hope the trials could be finished in December, so that complete execution of B40 could be carried out in 2025," energy ministry senior main Eniya Listiani Dewi said in a declaration on Tuesday.
The Indonesian Biofuel Producers Association (APROBI) said the market had the capacity to meet B40 demand, with installed capacity anticipated to increase to 20 million KL every year next year from 18 million KL now.
"However we will require more basic materials to satisfy B40 need," Ernest Gunawan, the general of APROBI informed Reuters on Wednesday.
The biodiesel market would require 13.9 million metric lots 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 greatest palm oil association GAPKI said a decline in exports suggested there would suffice basic materials to provide the B40 mandate for now.
But the market would need to assess "which one would be better", GAPKI chairman Eddy Martono said, referring to the possibility a boost in exports would make providing the domestic market less practical.
Indonesia's palm oil output is estimated to reach 54.4 million tons in 2024, a 2.26% increase from in 2015, while exports are expected to decline by 2.47% to 29.5 million tons as domestic usage rose, driven by biodiesel required.
The ministry had checked the biodiesel, blended with 40% of palm oil, on a train for the very first time previously today, while planning to evaluate the B40 mix on agriculture machinery, power plants and in the shipping market, it said. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D'Souza and Barbara Lewis)