The Indonesian government has increased the allocation of biodiesel based on palm for 2024 at 1.96%, rising from 13.1 billion liters last year to 13.4 billion liters, as reported by AgriCensus in a circular from the Ministry of Energy and Resources.
The country maintained the biodiesel blending mandate at 35% (B35), according to the December 1 report.
The country's Biofuel Producers Association, APROBI, reported that in October this year, Indonesia produced 10.75 billion liters of biodiesel. Internal distribution reached 10.23 billion liters, and 152 million liters of this total were exported.
In November, the Indonesian Palm Oil Association (Gapki) estimated that Indonesia's domestic consumption of palm oil for biodiesel in 2023 would increase to 10.6 million tonnes, compared with 9.1 million tonnes the previous year. The consumption of palm oil for food would also increase, from 9.89 million tons to 10.3 million tons.
Indonesia prepares to surpass palm oil consumption in food with growth in use for biodiesel
This forecast would mark the first time that palm oil consumption for biodiesel would exceed consumption for food, driven by an overall increase in domestic consumption coupled with a slower production rate that is expected to curb export availability of palm oil from the United States. largest producer in the world, as reported by AgriCensus.
This trend is expected to continue in 2024. Gapki forecasts domestic consumption of 25.4 million tons, surpassing 23.3 million tons in 2023. Exports, on the other hand, are expected to decrease to 29 million tons in 2024, compared to 30.3 million tons in 2023.
It was initially planned to introduce the B40 blend mandate in 2021. However, Indonesia postponed the plans due to high costs and lack of infrastructure, as reported. The B35 mixing mandate was implemented in February, becoming effective nationwide in August. Some market doubts about the full application of the B35 program were observed by AgriCensus.
Despite ongoing trials for B40, the Ministry of Energy has not yet established a timeline for implementation, according to the report.
Indonesia's biodiesel production capacity in 2023 is estimated to exceed 17 billion liters, according to APROBI estimates.
Source: Oils & Fats International
