JAKARTA, July 24 (Reuters) - Indonesia, the world's greatest palm oil producer, 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 stated.
If executed, the B40 mandate could increase biodiesel intake to approximately 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL approximated to be consumed in 2024.
"We hope the trials might be completed in December, so that complete application 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) stated the market had the capability to satisfy B40 demand, with installed capability anticipated to rise to 20 million KL annually next year from 18 million KL now.
"However we will need more basic materials to meet B40 need," Ernest Gunawan, the secretary general of APROBI told Reuters on Wednesday.
The biodiesel market would require 13.9 million metric lots of unrefined palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million tons required this year, he added.
Indonesia's most significant palm oil association GAPKI said a decline in exports meant there would suffice raw products to provide the B40 mandate for now.
But the industry would require to assess "which one would be better", GAPKI chairman Eddy Martono said, referring to the possibility an increase in exports would make supplying the domestic market less practical.
Indonesia's palm oil output is approximated to reach 54.4 million loads in 2024, a 2.26% increase from in 2015, while exports are expected to decline by 2.47% to 29.5 million tons as domestic consumption increased, driven by biodiesel required.
The ministry had evaluated the biodiesel, combined with 40% of palm oil, on a train for the very first time earlier today, while planning to test 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)
