Indonesia raises palm-based biodiesel allocation for 2024 to 13.41 mil kl: ministry

Indonesia will raise its allocation of palm-based biodiesel for 2024 to 13,406,498 kiloliters (kl), 1.96% higher than this year, the country’s Energy and Ministry Resources ministry said in a circular signed November 29.

The country’s biodiesel blending mandate is set to remain at B35, where approximately 35% of palm-based biodiesel is blended with 65% of diesel.

For 2023, Indonesia’s biodiesel allocation was set at 13,148,594 kl, inclusive of a 156,531 kl of reserve volume.  

As of October this year, Indonesia has produced 10.75 million kl of biodiesel, of which 10.23 million kl have been distributed domestically and 152,245 kl exported, data from the country’s biofuels producers association APROBI showed.

Earlier in November, the Indonesian Palm Oil Association (Gapki) had estimated Indonesia’s domestic palm oil consumption for biodiesel in 2023 to rise to 10.6 million mt (around 12.2 million kl), up from 9.1 million mt in 2022, with palm oil consumption for food at 10.3 million mt, up from 9.89 million mt last year.

This would mark the first time palm oil consumption for biodiesel has exceeded that of food, with the overall rise in domestic consumption plus slower pace of production expected to curtail palm oil export availability from the world’s largest producer.  

The trend is expected to continue into 2024, with Gapki pegging domestic consumption at 25.4 million mt (up from 23.3 million mt in 2023), while exports would dip further to 29 million mt from the estimated 30.3 million mt in 2023.

Indonesia had originally planned to transit into a B40 blending mandate as early as 2021, though plans were delayed amid high costs and a lack of infrastructural readiness.

The B35 blending mandate was implemented earlier in February this year, though a nationwide rollout was only achieved in August, with some market participants also skeptical that the B35 programme has been fully enforced. 

Tests for B40 are currently underway, with the energy ministry yet to commit on any timeline for implementation. 

Indonesia’s biodiesel production capacity in 2023 is expected to exceed 17 million kl, according to estimates from APROBI.