Indonesia Raises Allocation of 2024 Palm-Based Biodiesel

Indonesia Raises Palm-Based Biodiesel Allocation Amidst Shifting Trends

In the ever-evolving landscape of Chemical News and industry developments, a recent update from Indonesia takes center stage. The Indonesian government, in a move reported by AgriCensus, has increased the allocated volume of palm-based biodiesel for 2024 by 1.96%, rising from the previous year’s 13.1 billion liters to a new benchmark of 13.4 billion liters. This development, disclosed in the Energy and Resources Ministry’s circular, also solidifies the country’s commitment to a 35% biodiesel blending requirement (B35), as outlined in a report on December 1.

As of October this year, Indonesia has already produced a substantial 10.75 billion liters of biodiesel. Of this, 10.23 billion liters have been distributed domestically, while 152 million liters have found their way to international markets, according to data from APROBI, the country’s biofuels producers’ association.

Also Read : What is Biodiesel?

Projections and Impact on Palm Oil Consumption

Looking ahead, the Indonesian Palm Oil Association (Gapki) anticipates a notable rise in domestic palm oil consumption for biodiesel in 2023. Projections indicate a surge to 10.6 million tonnes, up from 9.1 million tonnes the previous year. Concurrently, palm oil consumption for food is expected to witness an increase from 9.89 million tonnes to 10.3 million tonnes. This significant shift marks the first instance where palm oil consumption for biodiesel surpasses that for food, potentially influencing palm oil export availability from Indonesia, the world’s largest producer. The increased domestic consumption and slower production growth might impact global supply dynamics.

This trend is forecasted to continue into 2024, with Gapki predicting domestic consumption to reach 25.4 million tonnes, up from 23.3 million tonnes in 2023. Simultaneously, exports are projected to decrease to 29 million tonnes from 30.3 million tonnes in 2023.

Despite initial plans for a B40 blending mandate in 2021, Indonesia faced delays attributed to high costs and insufficient infrastructure. The B35 blending mandate, introduced in February and fully implemented nationwide in August, faced uncertainties regarding complete enforcement, as reported by AgriCensus. While tests for B40 blending are ongoing, the Energy Ministry has not outlined a specific timeline for its implementation.

APROBI remains optimistic, estimating Indonesia’s biodiesel production capacity to surpass 17 billion liters in 2023. Stay tuned for more updates on the dynamic intersection of Chemical News, industry shifts, and the evolving landscape of biodiesel in Indonesia.