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 combined into biodiesel next year, the energy ministry said.

If implemented, the B40 required could 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 application 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 demand, with installed capacity expected 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 demand,” Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.

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

Indonesia’s biggest palm oil association GAPKI stated a decrease in exports meant there would be sufficient basic materials to provide the B40 required in the meantime.

But the industry would need to evaluate “which one would be more important”, GAPKI chairman Eddy Martono stated, referring to the possibility an increase in exports would make providing the domestic market less practical.

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 anticipated to decrease by 2.47% to 29.5 million lots as domestic usage increased, driven by biodiesel required.

The ministry had actually tested the biodiesel, combined with 40% of palm oil, on a train for the first time previously this week, while planning to check the B40 mix on agriculture equipment, 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 Lewis)