"Indonesia’s Prabowo aims for 50% palm biodiesel blending by 2025"

Indonesia’s Prabowo Subianto has set an ambitious goal to reach a 50% blending rate of palm biodiesel by 2025. This plan is part of a broader strategy to enhance the country’s energy sustainability and reduce reliance on fossil fuels. The initiative aims to significantly increase the use of palm oil-based biodiesel in Indonesia’s energy sector over the next few years.

Indonesia’s president-elect, Prabowo Subianto, aims to enforce a mandatory 50% palm oil-based biodiesel blend by early next year, which he believes will reduce fuel imports by $20 billion annually.

Last week, Indonesia announced its plan to increase the blending rate to 40% by January 2025, up from the current 35%, to cut fuel imports and lower fossil fuel emissions. Prabowo will succeed Joko Widodo in October, and the current administration has instructed the palm oil sector to prepare for a 50% blend, with tests already underway. "We are currently at B35 and will expedite to B40 and then B50," Prabowo stated on Saturday.

"With B50, a 50% palm oil biodiesel blend, we expect to save $20 billion per year by avoiding sending this money abroad. We aim to achieve this by the end of this year or early next year," he added. Following the announcement, Malaysia's palm oil futures surged to their highest in over a month before settling at 3,921 ringgit ($902.42) per metric ton, a 1.4% increase. GAPKI, Indonesia's largest palm oil producers association, stated that implementing B50 by early 2025 is not feasible due to insufficient testing, according to their chairman.

APROBI, the biofuel producers association, noted that producers will require time to test B50 fuel and expand production capacity to meet the increased demand, according to their secretary general. Biofuel expert Tatang Hernas Soerawidjaja from Bandung Institute of Technology mentioned that the biodiesel industry might need to enhance product quality to ensure stability for higher mandatory blending. Biodiesel can develop sediment when exposed to oxygen, which could block engine filters, he said.

"Some biodiesel producers may need to invest in new equipment to meet the new standards, which could take six months. Following that, commercialisation tests, including vehicle and storage tests, would also take six months," Tatang explained. "It would be prudent to implement B50 by the end of 2025 at the earliest," he added. GAPKI estimates that B50 will require about 18 million metric tons of crude palm oil, an increase from the 11 million metric tons used for B35 this year. Since 2019, Indonesia's palm oil consumption has grown by 7.6% annually on average, while production has risen less than 1% per year. The increased biodiesel mandate is expected to reduce export volumes.

"Achieving a 50% blend in the coming months is not feasible as required trials have not been conducted. Reaching 40% itself is a significant challenge," said a Mumbai-based trader. The palm biodiesel mandate in Indonesia applies to land transport, trains, industrial machinery, and diesel power plants. Indonesia is also working on developing palm-based jet fuel and has conducted flight tests, although the planned 3% biofuel blending for jet fuel by 2020 has been delayed.

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Source: Reuters‍