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Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

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

If implemented, the B40 mandate could increase biodiesel consumption to approximately 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 finished in December, so that full application of B40 could be brought out in 2025,” energy ministry senior official Eniya Listiani Dewi said in a statement on Tuesday.

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

“However we will need more basic materials to fulfill B40 demand,” Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.

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

Indonesia’s greatest palm oil association GAPKI said a decline in exports implied there would be enough raw products to provide the B40 mandate for now.

But the industry would require to evaluate “which one would be better”, GAPKI chairman Eddy Martono said, referring to the possibility an increase in exports would make supplying 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 last year, while exports are anticipated to decline by 2.47% to 29.5 million loads as domestic consumption rose, driven by biodiesel required.

The ministry had evaluated the biodiesel, blended with 40% of palm oil, on a train for the very first time earlier this week, while preparing to evaluate the B40 mix on farming machinery, power plants and in the shipping market, it stated. ( by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D’Souza and Barbara Lewis)