Indonesia, the world’s largest producer of palm oil, is preparing to increase the share of palm oil blended into biodiesel from 35% to 40% (B40) in 2025, according to the energy ministry. This change could elevate biodiesel consumption to approximately 16 million kilolitres (KL) next year, up from an estimated 13 million KL in 2024.
Eniya Listiani Dewi, a senior official in the energy ministry, expressed hopes that trials for the B40 mandate would be completed by December, allowing for full implementation in 2025. The Indonesian Biofuel Producers Association (APROBI) indicated that the industry has the capacity to meet this demand, with installed capacity projected to rise to 20 million KL annually next year, up from the current 18 million KL.
However, to support the B40 mandate, the biodiesel industry will require 13.9 million metric tons of crude palm oil, an increase from the estimated 11 million tons needed this year. Ernest Gunawan, APROBI’s secretary general, emphasized the need for more raw materials to meet the anticipated demand.
Indonesia’s palm oil output is forecasted to reach 54.4 million tons in 2024, marking a 2.26% increase from the previous year. Meanwhile, exports are expected to decline by 2.47% to 29.5 million tons due to rising domestic consumption driven by the biodiesel mandate.
The energy ministry recently conducted a test of the B40 biodiesel blend on a train and plans to further test it on agricultural machinery, power plants, and in the shipping industry. The country’s largest palm oil association, GAPKI, noted that a decrease in exports has created a sufficient supply of raw materials for the B40 mandate, but they will need to evaluate the balance between domestic supply and export viability.