Indonesia, the largest palm oil producer globally, is preparing to increase the palm oil content in its biodiesel from 35% to 40% (B40) starting in 2025. The energy ministry announced that trials are currently underway, aiming for completion by December to facilitate full implementation next year.
If the B40 mandate is enacted, biodiesel consumption could rise to approximately 16 million kilolitres (KL) in 2025, up from an estimated 13 million KL in 2024. Eniya Listiani Dewi, a senior official at the energy ministry, expressed optimism about the timeline.
The Indonesian Biofuel Producers Association (APROBI) confirmed that the industry has the capacity to meet the anticipated B40 demand, with installed capacity projected to increase from 18 million KL to 20 million KL annually. However, meeting this demand will require a significant increase in raw materials, specifically crude palm oil.
To produce 16 million KL of biodiesel next year, the industry will need approximately 13.9 million metric tons of crude palm oil, compared to an estimated 11 million tons for the current year. Despite a decline in exports, Indonesia’s palm oil association (GAPKI) indicated that there would be sufficient raw materials to meet the domestic B40 mandate for now. However, GAPKI’s chairman, Eddy Martono, noted the potential conflict between domestic supply and export value.
Indonesia’s palm oil production is expected to reach 54.4 million tons in 2024, marking a 2.26% increase from the previous year. Conversely, exports are projected to decrease by 2.47% to 29.5 million tons as domestic consumption rises, driven by the biodiesel mandate.
The energy ministry has begun testing the B40 biodiesel blend on various platforms, including trains, agricultural machinery, power plants, and in the shipping industry.