Indonesia must increase its biodiesel production capacity by an additional 4 million kilolitres to support the government’s plan to implement a 50% biodiesel blend (B50) next year, according to the Indonesian Biofuel Producers Association (APROBI). The country, which is the world’s largest producer of palm oil, has steadily increased its mandatory biodiesel blending requirements, recently raising the blend to 40% (B40) from the previous 35% (B35).

APROBI Secretary General Ernest Gunawan stated that Indonesia currently has an installed biodiesel production capacity of approximately 19.6 million kilolitres. However, if the government proceeds with the B50 mandate, annual biodiesel demand is projected to rise to 19 million kilolitres. Given that production facilities typically operate at around 85% of their total capacity due to routine maintenance and operational constraints, the country will need to expand its output to meet the anticipated demand.

Gunawan emphasized that biodiesel plants cannot operate at full capacity continuously. "We utilise, on average, 85% of the installed capacity because there are maintenance activities. We cannot run at 100% capacity," he explained. This limitation means that Indonesia’s current production capacity is not sufficient to meet the projected demand under the B50 mandate, necessitating further investment in production infrastructure.

For 2024, Indonesia’s biodiesel demand is estimated to reach 15.6 million kilolitres under the current B40 blend. The push for higher biodiesel blends aligns with the country’s broader strategy to reduce dependence on fossil fuel imports, support the palm oil industry, and promote more sustainable energy sources. The expansion of biodiesel production will require additional investments from both the government and private sector to build new facilities and optimize existing ones.

Indonesia's commitment to biodiesel blending is part of its long-term energy transition plan, aiming to lower carbon emissions and enhance energy security. The country has positioned itself as a global leader in biodiesel adoption, leveraging its abundant palm oil supply to reduce reliance on traditional diesel fuel. However, increasing the blend to B50 presents logistical and technical challenges, including the need for further research on fuel performance, engine compatibility, and infrastructure readiness.

Despite these challenges, the government remains determined to move forward with the B50 mandate as part of its sustainability goals. Industry stakeholders, including APROBI, continue to work closely with policymakers to ensure a smooth transition while addressing production capacity concerns. As Indonesia pushes ahead with its biodiesel program, expanding production capabilities will be critical to meeting domestic demand and maintaining the stability of the biodiesel supply chain.