JAKARTA, July 24 (Reuters) - Indonesia, the world's biggest palm oil manufacturer, 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 carried out, the B40 required might increase biodiesel usage 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 finished in December, so that complete implementation 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 satisfy B40 need, with set up capacity anticipated to increase to 20 million KL annually next year from 18 million KL now.
"However we will need more basic materials to fulfill B40 need," Ernest Gunawan, the secretary general of APROBI told Reuters on Wednesday.
The biodiesel industry would need 13.9 million metric tons of unrefined palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million heaps required this year, he added.
Indonesia's biggest palm oil association GAPKI said a decrease in exports implied there would suffice raw materials to supply the B40 mandate for now.
But the market would need to evaluate "which one would be better", GAPKI chairman Eddy Martono said, describing the possibility a boost in exports would make providing the domestic market less practical.
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 tons as domestic consumption increased, driven by biodiesel mandate.
The ministry had checked the biodiesel, combined with 40% of palm oil, on a train for the very first time previously today, while planning to evaluate the B40 mix on agriculture machinery, 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)
