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Indonesia needs to expand its biodiesel production capacity by 4 million kilolitres to meet demand if the government raises the mandatory biodiesel blending rate to 50%, biodiesel producers' group APROBI said on Thursday.
Indonesia, the world's largest palm oil producer, raised its mandatory biodiesel blending rate to 40% from palm oil, up from 35% previously, and is working to increase it further to 50% — known as B50 — next year.
APROBI Secretary-General Ernest Gunawan explained that Indonesia has a combined installed production capacity of around 19.6 million kilolitres of biodiesel. If the 50% blend is implemented, biodiesel demand is expected to rise to 19 million kilolitres a year.
"On average, we utilise 85% of installed capacity because of maintenance work. We cannot operate at 100% of production capacity," Gunawan said.
Biodiesel demand this year is estimated at around 15.6 million kilolitres under the current 40% blending rate.
Source: Bernama