Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025
JAKARTA, July 24 (Reuters) - Indonesia, the world's most significant palm oil manufacturer, 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 required might increase biodiesel consumption to as much as 16 million kilolitres (KL) next year, the ministry said, from 13 million KL estimated to be consumed in 2024.
"We hope the trials might be completed in December, so that complete implementation of B40 could be carried out in 2025," energy ministry senior main Eniya stated in a declaration on Tuesday.
The Indonesian Biofuel Producers Association (APROBI) said the market had the capacity to meet B40 demand, with installed capability anticipated to rise to 20 million KL each year next year from 18 million KL now.
"However we will need more raw materials to fulfill B40 demand," Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.
The biodiesel market would need 13.9 million metric lots of crude palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million tons required this year, he added.
Indonesia's most significant palm oil association GAPKI stated a decline in exports indicated there would suffice raw materials to supply the B40 required for now.
But the industry would need to assess "which one would be more valuable", GAPKI chairman Eddy Martono said, describing the possibility a boost in exports would make providing the domestic market less viable.
Indonesia's palm oil output is estimated to reach 54.4 million lots in 2024, a 2.26% increase from last year, while exports are expected to decline by 2.47% to 29.5 million lots as domestic usage increased, driven by biodiesel required.
The ministry had actually tested the biodiesel, mixed with 40% of palm oil, on a train for the very first time earlier today, while planning to test 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 Barbara Lewis)