Indonesia may begin implementing a program to use biodiesel with 35% blend of palm oil-based fuel, known as B35, from January 2023, a senior Energy Ministry official said on Friday.

Currently the world's largest producer of palm oil, Indonesia uses B30, containing 30% palm oil fuel. The overall allocation of palm oil-based fuel for 2023 is estimated at about 13 million kiloliters by 2023, he said.

Indonesia's allocation for 2022 was 11.03 million kilolitres.

Indonesian President Joko Widodo told his cabinet earlier this week to prepare the mechanism to implement B35 amid expectations that crude oil prices would remain high next year.

"B35's policy is taken in anticipation of rising world oil prices and to reduce imports, while on the other hand, this policy also aims to increase the use of renewable energy," said Dadan Kusdiana, a ministry official.

Southeast Asia's largest and most populous country is among the region's top fuel importers, but officials said import bills have been significantly reduced since Indonesia began expanding the portion of palm oil in biodiesel.

The expected implementation of the B35 has helped palm oil prices in Malaysia rise, although some market participants were disappointed that the mix was lower than the 40% forecast. [POI/] The Ministry of Energy is conducting tests for biodiesel containing 40% fuel made with palm oil.

"Ten of the 12 vehicles tested completed the road test without significant problems, and then we will determine the specification of the B35 biodiesel," Dadan added, referring to the B40 tests.

"We hope that the B35 programme can be implemented from January 2023."

Indonesia is testing two b40 formulations. The first is a diesel blend with 40% fatty acid methyl esters (FAME), and the second, a diesel blend with 30% FAME mixed with 10% green diesel made from refined, bleached and deodorized palm oil (RBDPO).

Source: Época Negócios