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The Ministry of Energy and Mineral Resources (ESDM) estimates that a minimum stock of crude palm oil (CPO) of around 17.57 million kiloliters will be needed to support the Biodiesel B40 program.
This estimation is based on the assumption of diesel fuel needs for the year 2024, which is approximately at 38.04 million kiloliters. Meanwhile, with an average GDP growth assumption of 5 percent, the distribution of B40 requires domestic CPO stocks of around 17.57 million kiloliters, or about 15.29 million tons of CPO.
“Currently, further studies are being conducted regarding the use of B40 for non-automotive sectors, with testing expected to be completed by the end of 2024,” Secretary General of the ESDM ministry, Dadan Kusdiana, told Bisnis.com on Thursday, April 25, 2024.
The testing for the non-automotive sector is being conducted in agricultural machinery, heavy mining equipment, power plants, railways, and maritime transportation. Previous B40 road tests were conducted in 2022.
Dadan said that the road test was technically acceptable. On the other hand, he suggested that there is a trend in terms of consumption for the realization of Biodiesel B35 distribution at the beginning of 2024 compared to the previous year. He estimated that this consumption growth trend would continue until the middle of the year.
The realization volume of Biodiesel B35 distribution in the first quarter of 2024 reached 2.86 million kiloliters or 21.37 percent of the designated quota of 13.41 million kiloliters currently. Meanwhile, the realization of Biodiesel B35 distribution in the same period last year was at the level of 2.55 million kiloliters.
“There is an increase in consumption by 1.37 percent from 2023 to 2024 for the same month period,” Dadan said.
Additionally, the trend of realization of fatty acid methyl ester (FAME) distribution has increased during January to March 2024 compared to the first quarter of 2023. The Ministry of Energy and Mineral Resources predicts that the consumption trend of Biodiesel B35 in the next quarter will continue to increase. Previously, President & Vice President-elect, Prabowo Subianto & Gibran Rakabuming Raka, targeted the execution of the Biodiesel B50 & Bioethanol E10 programs in 2029. Issues regarding the supply of raw materials from upstream, land provision, and the sustainability of the biodiesel market are currently under discussion within the campaign team.
Deputy Chairman of the National Campaign Team (TKN) Prabowo-Gibran Strategic Coordinator, Eddy Soeparno, said that they would reconsider the commitment of supply from palm oil and sugarcane producers. He hopes that the supply commitment can be increased along with efforts to accelerate the percentage of biodiesel blending.
“Although worldwide biodiesel utilization is maximum at B35, it doesn’t mean that it can’t be done to increase B35 to B40 and B50,” Eddy said on Thursday, April 25, 2024.
Eddy added that they are also addressing the availability of land to increase biofuel production, such as for increasing sugarcane and sorghum production as biofuel raw materials. On the other hand, the government will encourage State energy company PT Pertamina to invest in biofuel processing facilities, which are currently relatively limited in production capacity.
“Currently, biofuel processing facilities are still low, Pertamina is still building those processing facilities,” Eddy said.
Source: Indonesian Business Post
