JAKARTA, July 24 (Reuters) - Indonesia, the world's greatest palm oil producer, is testing fuel with a view to increasing to 40% from 35% the share of palm-oil mixed into biodiesel next year, the energy ministry said.
If executed, the B40 required might increase biodiesel usage to up to 16 million kilolitres (KL) next year, the ministry said, from 13 million KL estimated to be consumed in 2024.
"We hope the trials could be completed in December, so that full application of B40 could be carried out in 2025," energy ministry senior main Eniya Listiani Dewi stated in a statement on Tuesday.
The Indonesian Biofuel Producers Association (APROBI) said the market had the capability to satisfy B40 demand, with set up capability expected 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 industry would require 13.9 million metric tons of unrefined palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million heaps needed this year, he included.
Indonesia's most significant palm oil association GAPKI stated a decline in exports implied there would suffice raw materials to supply the B40 mandate for now.
But the market would require to examine "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 viable.
Indonesia's palm oil output is approximated to reach 54.4 million lots in 2024, a 2.26% boost from last year, while exports are expected to decline by 2.47% to 29.5 million heaps as domestic intake rose, driven by biodiesel required.
The ministry had checked the biodiesel, combined with 40% of palm oil, on a train for the very first time earlier this week, while planning to test the B40 mix on farming machinery, power plants and in the shipping industry, it stated. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D'Souza and Barbara Lewis)
