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1 Indonesia Plans Increase in Palm Oil based Biodiesel In 2025

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 said.

If executed, the B40 required could increase biodiesel consumption to up to 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL approximated to be in 2024.

"We hope the trials might be completed in December, so that complete application of B40 could be brought out in 2025," energy ministry senior official Eniya Listiani Dewi said in a declaration on Tuesday.

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

"However we will need more basic materials to satisfy B40 need," Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.

The biodiesel industry would require 13.9 million metric loads of unrefined palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million loads needed this year, he added.

Indonesia's greatest palm oil association GAPKI stated a decline in exports suggested there would be sufficient raw products to provide the B40 required in the meantime.

But the market would require to evaluate "which one would be more valuable", GAPKI chairman Eddy Martono said, describing the possibility an increase in exports would make supplying the domestic market less feasible.

Indonesia's palm oil output is approximated to reach 54.4 million lots 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 usage rose, driven by biodiesel mandate.

The ministry had actually checked the biodiesel, combined with 40% of palm oil, on a train for the very first time previously today, while preparing to evaluate the B40 mix on agriculture machinery, power plants and in the shipping market, it stated. (Reporting by Bernadette Christina and Dewi Kurniawati