JAKARTA, July 24 (Reuters) - Indonesia, the world's most significant palm oil producer, is checking fuel with a view to increasing to 40% from 35% the share of palm-oil combined into biodiesel next year, the energy ministry stated.
If executed, the B40 required might increase biodiesel usage 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 could be completed in December, so that complete application of B40 might be performed in 2025," energy ministry senior main Eniya Listiani Dewi said in a statement on Tuesday.
The Indonesian Biofuel Producers Association (APROBI) said the market 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 raw products 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 lots required this year, he added.
Indonesia's most significant palm oil association GAPKI stated a decrease in exports meant there would suffice raw products to provide the B40 required in the meantime.
But the market would require to evaluate "which one would be more important", GAPKI chairman Eddy Martono stated, describing the possibility a boost 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 last year, while exports are expected to decline by 2.47% to 29.5 million heaps as domestic consumption increased, driven by biodiesel mandate.
The ministry had checked the biodiesel, blended with 40% of palm oil, on a train for the very first time previously this week, while planning to test the B40 mix on farming equipment, power plants and in the shipping market, it stated. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D'Souza and Barbara Lewis)
