JAKARTA, July 24 (Reuters) - Indonesia, the world's biggest palm oil manufacturer, is checking 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 implemented, the B40 mandate might increase biodiesel consumption to as much as 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL estimated to be consumed in 2024.
"We hope the trials might be finished in December, so that complete implementation of B40 could 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 industry had the capacity to meet B40 demand, with installed capacity anticipated to increase to 20 million KL each year 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 informed Reuters on Wednesday.
The biodiesel market would require 13.9 million metric tons of unrefined palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million heaps required this year, he added.
Indonesia's most significant palm oil association GAPKI said a decrease in exports implied there would suffice basic materials to provide the B40 required in the meantime.
But the market would need to examine "which one would be more important", GAPKI chairman Eddy Martono said, referring to the possibility a boost in exports would make providing the domestic market less viable.
Indonesia's palm oil output is estimated to reach 54.4 million heaps in 2024, a 2.26% increase from in 2015, while exports are anticipated to decline by 2.47% to 29.5 million tons as domestic usage increased, driven by biodiesel required.
The ministry had actually evaluated the biodiesel, mixed with 40% of palm oil, on a train for the first time earlier this week, while preparing to test the B40 mix on farming machinery, 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)