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The Indonesian government has increased the country’s palm-based biodiesel allocation for 2024 by 1.96% from last year’s 13.1bn litres to 13.4bn litres, AgriCensus reported the Energy and Resources ministry as saying in a circular.

The country’s biodiesel blending mandate was set to remain at 35% (B35), the 1 December report said.

As of October this year, Indonesia produced 10.75bn litres of biodiesel, of which 10.23bn litres was distributed domestically and 152M litres exported, according to data from the country’s biofuels producers’ association APROBI.

In November, the Indonesian Palm Oil Association (Gapki) estimated Indonesia’s domestic palm oil consumption for biodiesel in 2023 would increase to 10.6M tonnes, up from 9.1M tonnes the previous year, with palm oil consumption for food rising from 9.89M tonnes to 10.3M tonnes.

The forecast would be the first time palm oil consumption for biodiesel had exceeded that of food, with an overall rise in domestic consumption alongside a slower rate of production expected to hold back palm oil export availability from the world’s largest producer, AgriCensus wrote.

The trend was expected to continue into 2024, with Gapki forecasting domestic consumption at 25.4M tonnes – up from 23.3M tonnes in 2023 – while exports were expected to dip further to 29M tonnes from the 30.3M tonnes in 2023.

Although Indonesia had planned to introduce a B40 blending mandate as early as 2021, plans were delayed due to high costs and a lack of infrastructure, the report said.

The B35 blending mandate was introduced in February but was only rolled out nationwide in August, with some market participants having doubts that the B35 programme had been fully enforced, AgriCensus wrote.

Although tests for B40 were underway, the energy ministry had not set a timeline for implementation, the report said.

Indonesia’s biodiesel production capacity in 2023 is expected to exceed 17bn litres, according to APROBI estimates.