JAKARTA, July 24 (Reuters) - Indonesia, the world's greatest palm oil producer, is evaluating fuel with a view to increasing to 40% from 35% the share of palm-oil blended into biodiesel next year, the energy ministry stated.
If executed, the B40 required might increase biodiesel intake to up to 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL estimated to be consumed in 2024.
"We hope the trials could be ended up in December, so that full implementation of B40 could be carried out in 2025," energy ministry senior main 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 installed capacity expected to rise to 20 million KL yearly next year from 18 million KL now.
"However we will require more raw materials to fulfill B40 demand," Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.
The biodiesel market would need 13.9 million metric lots of crude palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million tons needed this year, he added.
Indonesia's greatest palm oil association GAPKI said a decline in exports meant there would suffice basic materials to supply the B40 mandate in the meantime.
But the market would need to assess "which one would be better", GAPKI chairman Eddy Martono said, describing the possibility a boost in exports would make supplying the domestic market less viable.
Indonesia's palm oil output is estimated to reach 54.4 million lots in 2024, a 2.26% increase from last year, while exports are expected to decrease by 2.47% to 29.5 million heaps as domestic intake rose, driven by biodiesel mandate.
The ministry had actually evaluated the biodiesel, combined with 40% of palm oil, on a train for the first time previously today, while preparing to check the B40 mix on agriculture equipment, power plants and in the shipping industry, it said. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D'Souza and Barbara Lewis)
