Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

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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 mixed into biodiesel next year,.

JAKARTA, July 24 (Reuters) - Indonesia, the world's greatest palm oil manufacturer, 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 stated.


If executed, the B40 mandate could increase biodiesel usage to as much as 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL estimated to be consumed in 2024.


"We hope the trials could be finished in December, so that complete implementation of B40 could be carried out in 2025," energy ministry senior official Eniya Listiani Dewi said in a statement on Tuesday.


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


"However we will require more basic materials to fulfill B40 demand," Ernest Gunawan, the secretary general of APROBI told Reuters on Wednesday.


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


Indonesia's greatest palm oil association GAPKI stated a decline in exports indicated there would suffice basic materials to provide the B40 mandate in the meantime.


But the market would require to assess "which one would be better", GAPKI chairman Eddy Martono said, describing the possibility an increase in exports would make providing the domestic market less viable.


Indonesia's palm oil output is approximated to reach 54.4 million loads in 2024, a 2.26% increase from in 2015, while exports are expected to decrease by 2.47% to 29.5 million loads as domestic consumption increased, driven by biodiesel required.


The ministry had actually evaluated the biodiesel, blended with 40% of palm oil, on a train for the first time earlier this week, while preparing to test the B40 mix on farming machinery, power plants and in the shipping market, it stated. (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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