Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

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JAKARTA, July 24 (Reuters) - Indonesia, the world's greatest 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,.

JAKARTA, July 24 (Reuters) - Indonesia, the world's greatest palm oil manufacturer, is checking 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 implemented, the B40 mandate might increase biodiesel intake to up to 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 ended up in December, so that complete implementation of B40 might be performed in 2025," energy ministry senior main Eniya Listiani Dewi stated in a declaration on Tuesday.


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


"However we will need more raw products to fulfill B40 need," Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.


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


Indonesia's biggest palm oil association GAPKI stated a decline in exports meant there would suffice raw materials to provide the B40 mandate in the meantime.


But the industry would require to evaluate "which one would be more valuable", GAPKI chairman Eddy Martono said, 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 loads in 2024, a 2.26% increase from in 2015, while exports are expected to decline by 2.47% to 29.5 million heaps as domestic intake rose, driven by biodiesel required.


The ministry had actually checked the biodiesel, mixed with 40% of palm oil, on a train for the very first time previously today, while preparing to evaluate the B40 mix on agriculture equipment, 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)

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