JAKARTA, July 24 (Reuters) - Indonesia, the world's most significant 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 carried out, the B40 mandate could increase biodiesel intake 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 might be ended up in December, so that full application of B40 might be performed in 2025," energy ministry senior official Eniya Listiani Dewi stated in a declaration on Tuesday.
The Indonesian Biofuel Producers Association (APROBI) stated the market had the capacity to meet B40 need, with installed capacity expected to rise to 20 million KL every year next year from 18 million KL now.
"However we will require more raw materials to satisfy B40 demand," Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.
The biodiesel industry would need 13.9 million metric lots of unrefined palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million tons required this year, he added.
Indonesia's greatest palm oil association GAPKI stated a decline in exports indicated 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 stated, 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 heaps in 2024, a 2.26% increase from in 2015, while exports are expected to decrease by 2.47% to 29.5 million tons as domestic intake increased, driven by biodiesel mandate.
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 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)
