Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025

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

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 mixed into biodiesel next year, the energy ministry said.


If executed, the B40 required could increase biodiesel consumption 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 might be completed in December, so that complete execution of B40 might be performed in 2025," energy ministry senior official Eniya Listiani Dewi said in a statement on Tuesday.


The Indonesian Biofuel Producers Association (APROBI) said the market had the capacity to meet B40 demand, with set up capability anticipated to increase to 20 million KL yearly next year from 18 million KL now.


"However we will need more raw products to meet 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 heaps needed this year, he added.


Indonesia's greatest palm oil association GAPKI said a decrease in exports suggested there would suffice basic materials to supply the B40 mandate for now.


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


Indonesia's palm oil output is estimated to reach 54.4 million heaps in 2024, a 2.26% increase from in 2015, while exports are expected to decline by 2.47% to 29.5 million loads as domestic usage increased, driven by biodiesel mandate.


The ministry had actually tested the biodiesel, combined with 40% of palm oil, on a train for the very first time earlier this week, while planning to evaluate the B40 mix on farming equipment, 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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