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 stated.
If implemented, the B40 mandate might increase biodiesel consumption to approximately 16 million kilolitres (KL) next year, the ministry said, from 13 million KL estimated to be consumed in 2024.
"We hope the trials might be finished in December, so that full application of B40 could be brought out in 2025," energy ministry senior main Eniya Listiani Dewi said in a statement on Tuesday.
The Indonesian Biofuel Producers Association (APROBI) stated the industry had the capability to fulfill B40 demand, with installed capacity anticipated to rise to 20 million KL annually next year from 18 million KL now.
"However we will need more basic materials to satisfy B40 demand," Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.
The biodiesel industry would need 13.9 million metric lots of crude palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million loads needed this year, he included.
Indonesia's most significant palm oil association GAPKI stated a decline in exports implied there would suffice basic materials to supply the B40 mandate for now.
But the market would need to examine "which one would be more valuable", GAPKI chairman Eddy Martono said, describing 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 tons in 2024, a 2.26% increase from in 2015, while exports are anticipated to decline by 2.47% to 29.5 million loads as domestic consumption increased, driven by biodiesel required.
The ministry had evaluated the biodiesel, blended with 40% of palm oil, on a train for the first time earlier today, while preparing to test the B40 mix on agriculture equipment, 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)
