JAKARTA, July 24 (Reuters) - Indonesia, the world's biggest 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 implemented, the B40 mandate could increase biodiesel consumption 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 ended up in December, so that complete implementation of B40 could be performed in 2025," energy ministry senior main Eniya Listiani Dewi stated in a declaration on Tuesday.
The Indonesian Biofuel Producers Association (APROBI) stated the industry had the capacity to meet B40 demand, with installed capability anticipated to increase to 20 million KL each year 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 told Reuters on Wednesday.
The biodiesel market would require 13.9 million metric tons of crude palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million tons required this year, he included.
Indonesia's greatest palm oil association GAPKI said a decline in exports implied there would be sufficient basic materials to supply the B40 mandate in the meantime.
But the industry would need to assess "which one would be better", GAPKI chairman Eddy Martono said, describing the possibility an increase in exports would make providing the domestic market less practical.
Indonesia's palm oil output is estimated to reach 54.4 million tons in 2024, a 2.26% increase from in 2015, while exports are anticipated to decrease by 2.47% to 29.5 million heaps as domestic intake rose, driven by biodiesel mandate.
The ministry had actually tested the biodiesel, blended with 40% of palm oil, on a train for the first time earlier today, while planning to evaluate the B40 mix on farming equipment, power plants and in the shipping market, it said. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D'Souza and Barbara Lewis)