Mission Agroenergy Ltd

Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

JAKARTA, July 24 (Reuters) – Indonesia, the world’s most significant palm oil manufacturer, is evaluating fuel with a view to increasing to 40% from 35% the share of palm-oil blended into biodiesel next year, the energy ministry said.

If executed, the B40 required might increase biodiesel consumption to up to 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 full implementation of B40 could be brought out in 2025,” energy ministry senior official Eniya Listiani Dewi stated in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) said the market had the capacity to satisfy B40 need, with set up capacity expected to increase to 20 million KL annually next year from 18 million KL now.

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

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

Indonesia’s most significant palm oil association GAPKI said a decline in exports implied there would be sufficient basic materials to supply the B40 required in the meantime.

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

Indonesia’s palm oil output is estimated to reach 54.4 million heaps in 2024, a 2.26% boost from in 2015, while exports are anticipated to decrease by 2.47% to 29.5 million loads as domestic consumption increased, 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 test 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)