Indonesia Biofuel Program, the most advanced in the world

[Indos]

This thread will be the thread showing Indonesia biofuel program news and update.

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Current B30 program is expected to save about 7.8 billion USD foreign exchange and bring the money to be circulated inside the country for 2022 fiscal year. The current program will also reduce around 26,95 million ton of CO2 emissions for the year 2022 and also around 1.2 million jobs are created by the program.

Indonesia is currently undergoing B 40 program test that is targeted to complete in December 2022.

Source

Ada D100, Program Biodiesel Hanya Cukup Sampai B40?

Pemerintah terus menggenjot pengembangan green diesel atau D100 sebagai bahan campuran untuk program bahan bakar nabati biodiesel

www.cnbcindonesia.com

Siap-Siap Solar B40, Uji Jalan Ditargetkan Kelar Akhir Tahun!

Pemerintah menargetkan uji jalan pencampuran biodiesel 40% pada minyak Solar (B40) tuntas pada Desember 2022.

www.cnbcindonesia.com

 

[Indos]

Indonesia sends cars to volcanic highlands for biodiesel tests​

Various sample fuels used in road tests of 40% palm-based biodiesel in Dieng, Central Java, Indonesia. - Bloomberg

• INDONESIA
• Wednesday, 26 Oct 2022
  2:54 PM MYT

JAKARTA (Bloomberg): Indonesia, the world’s biggest palm oil producer, is testing to see whether vehicles can run effectively on diesel blended with 40% cooking oil, and if it works well at higher altitudes. A successful outcome would shift more local supply toward biofuel and curb exports.

Six Toyota Innova minivans filled with 40% palm-based biodiesel are going to zoom across Java island in coming weeks. They set off from Dieng, an active volcanic area in central Java, on Wednesday to see if the tropical oil can adapt to higher altitudes. Palm normally tends to solidify at cooler temperatures.

Indonesia has been pushing to use a higher proportion of palm oil in biodiesel as a way to cut fossil-fuel imports, reduce emissions and absorb excess palm oil supply. The South-East Asian nation currently requires vehicles to use a 30% blend, known as the B30 mandate, and is trying to increase that to B40.

If successful, the move would divert more palm oil toward biofuel and reduce supply available for exports. This has the potential to drive up global prices and increase cooking oil costs. Earlier this year, palm oil futures soared to a record when Indonesia banned exports to curb domestic inflation, and then tumbled as stockpiles overflowed and forced it to change course.


Two formulas are used in the road tests. One is a blend of 30% fatty acid methyl ester (Fame), 10% hydrogenated vegetable oil (HVO) and 60% gasoil. The other uses a mix of 40% Fame and 60% gasoil.

So far, the road tests show that fuel-use efficiency is similar overall to the B30 blend, said Dadan Kusdiana, director general of new and renewable energy at the Energy and Mineral Resources Ministry. They also showed that the engine can start about one second after ignition and that the blend can be used in higher areas with temperatures between 17-18°C, Kusdiana said.

The ministry will submit recommendations for the B40 mandate after the tests are completed in December. The government will then decide whether and when the higher blend will be implemented, Kusdiana said. If implemented, the B40 mandate will add about 3.4 million to 3.5 million kiloliters of palm-based biodiesel to domestic consumption, he said. As of October, the country had consumed about eight million kiloliters of biodiesel, out of an annual target of 11 million kiloliters, Kusdiana said.

The volume of Indonesia’s palm-biodiesel blending is the highest in the world. By contrast, Malaysia, the No.2 producer, is going to slow the implementation of its B20 mandate in transport to prioritize palm oil supply for food.

Indonesia sends cars to volcanic highlands for biodiesel tests

Indonesia, the world’s biggest palm oil producer, is testing to see whether vehicles can run effectively on diesel blended with 40% cooking oil, and if it works well at higher altitudes. A successful outcome would shift more local supply toward biofuel and curb exports.

www.thestar.com.my

Dieng, Java island

 

[Indos]

Indonesia government is now calculating the capacity of Indonesian refinery and CPO supplier for B40 program. There will be 10 % increase of refined CPO content if the program is implemented from current B30 program. Expected to start in January 2023 and is expected to save around 13 billion USD foreign exchange for every one year (based on current crude oil price) if it is implemented.

Source:

Biodiesel B40 Jalan, Kuotanya Bisa Capai 15 Juta KL di 2023

Kementerian ESDM berencana meningkatkan persentase pencampuran Bahan Bakar Nabati ke dalam BBM jenis Solar sebesar 40% atau B40.

www.cnbcindonesia.com

 

[Indos]

Inauguration of the Sugarcane Bioethanol Program for Energy Security at the PT Energi Agro Nusantara (Enero) Bioethanol Plant, Mojokerto Regency, East Java Province, November 4, 2022

Jokowi speech :


Good morning, peace be upon us all.

Ladies and gentlemen whom I respect,

We have started growing modernly grown sugarcane and we hope that later the productivity of that crop will get better and increase.

Because of what? We know everything that is called sugar import consumption until now, we still import per year it is 1,088,000 tons, per year. A huge amount. That's the new one for consumption, the one for the industry it's 3,569,000 tons per year.

Even though we know, in the 1800s Indonesia was the king of sugar. Our exports everywhere, to all countries, back then. The question is, why from what used to export, how come it is now importing. This must be something wrong, which we have to get straight.

Therefore, I order the Minister of SOEs to prepare seeds with the best varieties. Therefore, we are working with Brazil for this, which already has good experience in the management of sugarcane and sugarcane.

We hope that with a good way of cultivation, this modern one, in the next five years we can be independent. And, our food security, especially sugar, we can do it ourselves without having to import. But it does take time, maybe in the next five years. Our target is like that. Because we know, all countries today have a headache for everything, the first is food affairs, the second is energy affairs. Dizzy everyone. And, we have the opportunity to solve these problems.

Therefore, Mr. Pahala said earlier, if we want to make E5 (Ethanol 5) it takes approximately 350 thousand kiloliters and this factory now produces 30 thousand kiloliters. That is, for the E5 alone we need 10 factories as we see today. Imagine, it's just E5. If we need to go to E20 later, just multiply it, there is so much we still need from this sugarcane business.

Therefore, good cooperation between farmers and sugar factories, sugar factories themselves as well as these old machines will also soon be all changed by modern machines, so that the yield is high, farmers will also benefit because the amendments go up. Until whenever if the machines are old machines, sorry, Mr. Farmer, it will be difficult. The key is in the amendment,isn't it?

I have seen several factories first, if they continue like this, it will not be already. I want to talk, what do we want to talk about, it won't be the name of the solution, there is a solution, just a way out. The key is indeed good seedlings, machines with amendments, giving good amendments also to farmers. The key is only there. And, this does require a lot of investment, requires a lot of money. However, we already intend to change this. Who disagrees, point fingers?

This is what we're going to do. So that later in addition to the sugar being fulfilled, there is a side, namely because sugar also produces molasses, this is what is used to build an ethanol industry, build a bioethanol industry that will also strengthen our energy security. We also know, half of the energy we use, the fuel we use is 50 percent it's imported everything, just so we know. It shouldn't be this going on and on. Because we, if this sugarcane is successful, then the B30 palm oil can be increased again, this will strengthen the energy security of our country Indonesia.

I think that's what I want to convey in this good opportunity. And, by saying bismillahirrahmanirrahim, in the morning I declared that sugarcane bioethanol for energy security began.

Thanks.
Wassalamu'alaikum warahmatullahi wabarakatuh.



Read more: https://setkab.go.id/peresmian-prog...ojokerto-provinsi-jawa-timur-4-november-2022/

 

[Indos]

Jokowi program on sugar and ethanol production

4 November 2022

He said it needs 700.000 hectares land for additional sugar production (to meet sugar domestic demand and supply Indonesia ethanol program). Indonesia now is adding another 100.000 hectares for sugar production. He said he will try to add the remaining land (600.000 hectares) to meet the program target.

 

[Indos]

Indonesia may start using B35 biodiesel from Jan 2023, says energy ministry​

JAKARTA, Dec 9 (Reuters): Indonesia may start implementing a programme to use biodiesel with 35% blend of palm oil-based fuel, known as B35, from January, 2023, a senior energy ministry official has announced.

Currently the world's top palm oil producer, Indonesia uses B30, containing 30% palm oil-based fuel. The overall palm oil-based fuel allocation for 2023 is estimated at around 13 million kilolitres in 2023, he said.

Indonesia's 2022 allocation was 11.03 kilolitres.

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

"The B35 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," ministry official Dadan Kusdiana said.

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

The expectation of B35 implementation helped palm oil prices in Malaysia higher, although some market participants were disappointed the blend would be lower than the anticipated 40%.

The energy ministry has been running trials for biodiesel containing 40% of fuel made using palm oil.

"Ten out of 12 of the vehicles tested had completed the road test with no significant issue and next we will determine the specification for B35 biodiesel," Dadan added, referring to the B40 trials.

"Hopefully, the B35 programme can be implemented starting January 2023."
Indonesia is testing two formulation of B40, the first is a mix of diesel with 40% fatty acid methyl esters (FAME) and the second a mix of diesel with 30% FAME mixed with 10% green diesel made of refined, bleached and deodorised palm oil (RBDPO). - Reuters

Indonesia may start using B35 biodiesel from Jan 2023, says energy ministry

Indonesia may start implementing a programme to use biodiesel with 35% blend of palm oil-based fuel, known as B35, from January, 2023, a senior energy ministry official has announced.

www.thestar.com.my

 

[Indos]

PTPN III Develops Biopelet of Empty Palm Bunches with a Capacity of 200 Thousand Tons per Year​

The story of Hendra Gunawan • 5 hours ago

TRIBUNNEWS.COM -- PTPN III (Persero) Nusantara Plantation state owned Holding together with a Japanese company, PT PTEC Research & Development (PTEC) are collaborating on the development of a Biopelet plant made from empty oil palm bunches in Sei Mangkei SEZ, North Sumatra.

PTPN III (Persero) Nusantara Plantation Holding together with PT PTEC Research and Development (PTEC), a research and development company for the organic chemical industry from Japan, collaborated on the development of a Biopelet Plant made from empty oil palm bunches in Sei Mangkei SEZ.© HO

The plant will have a processing capacity of 1 million tons of empty bunches per year or the equivalent of a biopelet production of 200 thousand tons per year.

This cooperation was marked by the signing of the Heads of Agreement (HoA) the cooperation was carried out by the Deputy President Director of PTPN III (Persero) Nusantara Plantation Holding, Denaldy Mulino Mauna and the Director of PT PTEC Research & Development, Suwaki Yasufumi, which was witnessed by the President Director of TESS Holdings Co. Ltd., Yamamoto Kazuki in Batam, on Friday (23/12/2022).

Deputy President Director of PTPN III (Persero) Nusantara Plantation Holding, Denaldy Mulino Mauna, said that the early stage of cooperation in the development of empty bunch Biopelets has been carried out by PTPN VIII (PTPN III Subsidiary) with PTEC to meet the needs of tea drying fuel as a substitute for wood pellets which are increasingly expensive.

"For the next stage, PTPN III and PTEC will compile a Feasibility Study (FS) for the Development of an empty bunch Biopelet Plant with a capacity of 1 million tons of empty bunches/year equivalent to 200 thousand tons of biopelets/year in the Sei Mangkei SEZ, with local and export market orientation," said Denaldy.

PTEC targets the preparation process for the construction of a biopelet plant to start in 2023 with the need for an area of 32 ha in Sei Mangkei SEZ.

Denaldy said, PTPN III (Persero) as a Plantation BUMN Holding, has a great commitment in developing the New and Renewable Energy (EBT) business.

This is done to support Government policies, in accordance with Government Regulation number 79 of 2014 related to the new renewable energy mix target of 23 percent by 2025.

"PTPN Group is very concerned in supporting the Decarbonization program to achieve the target of reducing carbon emissions according to the NDC target of 29% by 2030," he said.

It is hoped that the development of biopellets based on empty palm bunches can provide added value in reducing carbon emissions by 48 thousand tons of CO2e / year as well as the potential for selling carbon credits.

In the process of processing fresh fruit bunches (FFB) of palm oil into Crude Palm Oil (CPO) at the PTPN Group Palm Oil Mill (PKS), empty bunches are one of the by-products produced in the processing process.

The total production potential of PTPN Group's empty bunches according to the 2024 RJPP is 3 million tons / year.

"As for the empty bunches, so far they have been used as organic fertilizer (land application) in the garden area adjacent to the PKS," added Denaldy.

Denaldy said, with the rapid development of New and Renewable Energy (EBT) in Indonesia, the use of empty bunches of palm oil has become more diverse. One of them, which can be in the form of the development of Bioethanol and Biopelets.

Denaldy hopes that, with the signing of the Head of Agreement (HOA), it will produce a feasibility study of the development of empty bunch Biopelets that is feasible and provides benefits for the parties.

"We hope that the progress of the development of this empty bunch Biopelet can be implemented immediately in the Sei Mangkei SEZ," said Denaldy.

PTPN III Kembangkan Biopelet Tandan Kosong Sawit Berkapasitas 200 Ribu Ton per Tahun

 

[Indos]

Sei Mangkei Special Economic Zone (April 2021)​

 

[Indos]

Commodities 2023: Lower palm oil prices likely but markets wary of supply, recession risks​

Highlights
CPO contract prices may average at MR 3,800/mt in 2023
Higher production seen from Malaysia, Indonesia
Recession, China, EU policies create demand uncertainties
Crude palm oil prices may ease in 2023 after hitting record highs last year, but "wild cards" such as Malaysia's labor crunch at its palm plantations, China's re-opening, and looming recession fears could upend forecasts, industry sources warned.

Third-month crude palm oil futures on Malaysia's commodity exchange are expected to be at around MR 3,800/mt ($859.24) in 2023, according to the median estimate of eight leading industry analysts and trade bodies polled by S&P Global Commodity Insights.

In 2022, the benchmark CPO contract price reached an all-time high in May due to the double whammy of the Russia-Ukraine war and Indonesia's temporary export ban, averaging at MR 4,943/mt – well above the 2021 average price of MR 4,142/mt in 2021 and much higher than the average price of MR 2,489.1/mt between 2017-2020.

Higher output likely​

Forecasts for Malaysia's palm oil production are optimistic as foreign workers are expected to return amid easing pandemic-induced restrictions in the country.

While the government restarted recruitments February 2022, the inflow of foreign workers has been much slower than industry expectations, partly due to slow government approvals.
The Malaysian Palm Oil Council said that palm oil production is set to recover in 2023 after three years of decline, with industry estimates forecasting a 3% to 5% increase over nearly 18 million mt produced in 2022.

Simultaneously, Malaysia's palm oil inventories jumped to the highest level in three years in October 2022. If the pace does not pick up in 2023, Malaysia's palm companies will lag in harvesting during peak production season, one Malaysian producer said.

Malaysia's larger rival, Indonesia's 2023 production is forecast to rise 3% on the year to 48.1 million mt, and exports to increase 2.5 million mt to 33.5 million mt, according to the Indonesian Palm Oil Association, or Gapki.

Globally vegetable oil production growth is likely to accelerate to 4% in 2023r, according to USDA forecasts, driven by a robust output growth forecast for rapeseed and soybean oils.

Recession fears may hurt demand​

The global economy is expected to face significant challenges in the months ahead and threats of global recession could hurt palm oil demand.

A mild recession is expected to begin early next year with the subsequent recovery to begin in the second half of 2023, S&P Global Market Intelligence said in a note on Dec. 12. On an annual basis, global GDP is forecast to expand just 0.3% from 2022 to 2023.

Similarly, the IMF forecast global growth to slow from 6.1% in 2021 to 2.7% in 2023 and expects many global economies to contract during part of 2022 or next. It previously forecast growth to slow to 3.6% in 2022 and 2023.

"If recession hits, it will be a bumpy road ahead. Buyers will have less purchasing power to import huge loads [of palm oil] ... consumption will fall," a trader said.

Indonesia's biodiesel program​

Industry sources said it is imperative for Indonesia to grow its domestic biodiesel blending mandate which would support consumption for palm oil, should palm exports drop because of the global recession.

Indonesia's B35 biodiesel mandate is expected to be implemented from February 2023 due to high crude oil prices and the move could increase domestic demand for palm towards biodiesel production, sources said. The increase in the blending mandate will likely boost Indonesian biodiesel demand 18% from 11 million kl to 13 million kiloliters, which translates to around 1.8-2 million mt of additional CPO consumption in 2023, industry sources said.

If Indonesia successfully implements its higher biodiesel mandate, Indonesia's CPO price could hit more than $1,000/mt by the second quarter of 2023, sources said. The spot price of CPO loading from Dumai for January was assessed at $962/mt on Dec. 30, data from S&P Global showed. The price has since declined 50.1% from the peak at $1,930/mt in March 2022.

Demand projections point downwards​

Demand outlook from the second-largest palm oil buyer China is now expected to weaken after the country faced a surge in COVID-19 infections ahead of the Lunar New Year festive period.

Meanwhile the EU bloc, traditionally the third-largest palm oil buyer in the world, has been winding down its palm oil imports in the last two years. Phasing out of palm oil imports will continue into next year as its anti-deforestation regulations get implemented.

However, demand from biggest buyer India, along with other price sensitive markets such as the MENA region, is set to grow in 2023 as CPO's significant discount against soybean oil and sunflower oil will likely support demand and pricing.

Commodities 2023: Lower palm oil prices likely but markets wary of supply, recession risks

Crude palm oil prices may ease in 2023 after hitting record highs last year, but wild cards such as Malaysia s labor crunch at its palm plantations, China s re opening, and looming recession fears cou

www.spglobal.com

 

[Indos]

October 2021

Flight Test of Indonesian made and developed BioAvtur is regarded as successful. The test flight using CN235 Flying Test Bed (FTB) plane.

 

[Indos]

Ministry of Energy and Mineral Resources: All Biodiesel Shipments Using B35 Specs Starting Next Week​

Story from BUSINESS • 56 minutes ago

Acting Director General of Gatrik, Ministry of Energy and Mineral Resources, Dadan Kusdiana. Photo: Fariza Rizky Ananda/coil© Provided by Coils


The Ministry of Energy and Mineral Resources will implement a policy of mixing fuel oil (BBM) with 35 percent palm oil or the B35 biofuel program (BBN) starting February 1, 2023. The Director General of New, Renewable Energy and Energy Conservation (EBTKE), Ministry of Energy and Mineral Resources, Dadan Kusdiana, said that starting next week, the delivery of B35 biodiesel has begun.

"This month we still remain B30. Starting next week, all shipments of this biodiesel use the B35 spec. So you as a user later don't have to worry. We ensure the quality of production and handling from transportation to mixing handling both continuously," said Dadan through a written statement after the socialization event for the implementation of B35 and the results of the B40 road test, quoted on Friday (13/1).

"As long as we raise the mix, it's always followed by an increase in specs. We emphasize the motto of biodiesel not to become an impurity," he added.

Dadan said that the implementation of biodiesel that is being implemented by the government is a national program that has been coordinated with relevant parties, including the Coordinating Ministry for Maritime Affairs and Investment. According to him, the program is a joint effort to reduce dependence on petroleum fuels, while bringing Indonesian palm oil to be better and more sustainable.

"This biodiesel program is not only a program of the Ministry of Energy and Mineral Resources to use it as fuel, but also how to encourage palm oil in Indonesia to provide broad benefits for the national economy and specifically for farmers," dadan said.

When the biodiesel implementation program was designed, Dadan said, the price of Crude Palm Oil (CPO) was in the range of USD 275 per ton and continued to increase in line with the increase in demand for palm oil due to the implementation of biodiesel.

"How can we raise the price of palm oil because the price of palm oil will automatically transfer to the price of FFB (fresh fruit bunches) of palm oil in farmers. In addition, we are still importing diesel even though the graph is declining. This is one of the breakthroughs and evidence that research and development results can be implemented and provide such broad benefits," dadan said.

FFB is palm fruit after being removed from the bunch, which is then processed and processed into the main products in the form of crude palm oil or CP and palm kernel oil or PKO. In addition to efforts to increase demand for palm oil, the government also encourages the development of CPO processing plants into biodiesel.

"Now many factories are established to process CPO into biodiesel, in the Sumatra to Sulawesi regions. We are currently encouraging the construction of factories in Papua to encourage demand and spread in the Papua region," explained Dadan.

Furthermore, Dadan revealed that with the enactment of B35, Indonesia will be able to control diesel imports even more. For the implementation of the B35 program in 2023, it is targeted to distribute biodiesel to reach 13.15 million kiloliters per year or 226 thousand barrels per day. Foreign exchange savings are estimated to reach around USD 10.75 billion or equivalent to Rp 161 trillion, employment of 1,653,974 people and Greenhouse Gas (GHG) emissions of 34.9 million tons of CO2e.

"The President has clearly requested for this to be implemented from him starting at the time of the B30 program. Finally, in the cabinet session on December 6, 2022, it was decided that we would do it with B35. Although we are actually preparing for the B40, we are ready if we are asked to upgrade to the B40 later. We already know which specifications will be used except for the additional infrastructure that we still have to do," dadan said.

Before the increase in the percentage of biodiesel mixing has been carried out, several technical preparations have been carried out to ensure the performance of the use of BBN mixture. Among them is testing the effect of using a 35 percent biodiesel mixture on the diesel engine filtration system, with the result that there is no indication of filter blocking in the Filter Blocking Tendency (FBT) test or the Filter Rig Test test. The recommendation is that there is no significant effect on the use of B35, where improvements have been made to the specifications of the Biodiesel used for the mixture.

Meanwhile, in preparation for the implementation of B40, the B40 Road Test has been carried out which has been launched on July 27, 2022, as the final series of tests. The results of this test are used as a basis for consideration before the implementation of B40. In this B40 road test, two types of B40 fuel mixtures were tested, namely B30D10 with a mixture formula of 30 percent biodiesel (B100*) plus 10 percent vegetable diesel / biohydrocarbon diesel / HVO (D100) also 60 percent diesel oil (B0), and B40 with a mixture formula of 40 percent Biodiesel (B100 *) plus 60 percent diesel oil (B0).

"We did do the B40 test, the principle is openness and objective. We also use proven mechanisms and SOPs. There is no example because we are indeed the first. Thank you and appreciation to all parties involved in the B40 test," concluded Dadan.

Kementerian ESDM: Seluruh Pengiriman Biodiesel Pakai Spek B35 Mulai Pekan Depan

 

[Indos]

Palm oil production in top Asian producers to remain tight in 2023​

January 12, 2023 — 08:45 pm EST

Written by Mei Mei Chu for Reuters ->

KUALA LUMPUR, Jan 12 (Reuters) - Palm oil production in the world's largest producers, Indonesia and Malaysia, will remain squeezed this year amid anticipation of rising demand from key market China, industry officials said in a seminar on Thursday.

The two Southeast Asian nations account for around 85% of the world's exports, but output have been stagnant in recent years due to a pandemic-induced labour shortage, low fertiliser application and slow expansion of new estates.

"After yet another disappointing year in 2022, the market expects palm oil output to increase in 2023 by around 2.5 million tonnes, led by Indonesia," said Julian McGill, regional head at agribusiness consultancy LMC International.

But this will not translate into much availability of palm oil for exports due to greater domestic processing in Indonesia, including the move to a higher biodiesel mandate, he said.

The Malaysian Palm Oil Board (MPOB) pegged the nation's 2023 production to rise marginally to 19 million tonnes, from 18.45 million tonnes in 2022, held back by a labour crunch.

The Indonesian Palm Oil Association (GAPKI) forecast Indonesia's output would dip to 50.82 million tonnes this year, from 51.33 million tonnes last year.

"Production of Indonesian palm oil industry is on a decline trend while on the demand side there is a shift in consumption from exports to domestic consumption," GAPKI official Fadhil Hasan said.

Indonesia's move to increase the use of palm oil in biodiesel to a 35% blend will add between 2.5 million to 3 million tonnes of crude palm oil demand domestically, he said.

MPOB Director-General Ahmad Parveez Ghulam Kadir said prices were expected to trade in a range of 4,000-4,200 ringgit per tonne this year, moderating from a record high logged last year.

Higher imports by China as it loosens COVID-19 rules, tightened export policy by Indonesia and risks to Ukrainian sunflower oil seed production and South American soybean supply will drive prices, he said.

Malaysia's benchmark crude palm oil prices FCPOC3 hit a record average of 4,910 ringgit ($1,123.57) a tonne in 2022 due to edible oil supply shortages triggered by the Russia-Ukraine conflict and Indonesia's exports restrictions.

The contract dropped to their lowest in nearly three weeks on Thursday at 3,908 ringgit ($896.95) a tonne. POI/

($1 = 4.3570 ringgit)

(Reporting by Mei Mei Chu; Editing by Ed Davies, Naveen Thukral, Gerry Doyle and Andrew Heavens)

((Ed.Davies@thomsonreuters.com)

https://www.nasdaq.com/articles/palm-oil-production-in-top-asian-producers-to-remain-tight-in-2023

 

[Indos]

Indonesia palm oil export curbs, biodiesel plans to hit world vegoil supplies​

A general view of a palm oil plantation in Siak regency, Riau province, Indonesia, April 26, 2022. Picture taken with a drone on April 26, 2022. REUTERS/Willy Kurniawan


January 13, 20239:39 PM GMT+7
Last Updated 21 hours ago

• Summary

• Indonesia plans B35 biodiesel from Feb 1
• Vegoil supplies to tighten as drought hits Argentine soybeans
• Malaysia's exports to climb amid lower shipments from Indonesia
• Palm oil demand seen rising on China reopening, India buying

SINGAPORE/JAKARTA, Jan 13 (Reuters) - A move by top palm oil exporter Indonesia to restrict shipments and boost domestic biodiesel consumption is set to squeeze global vegetable oil supplies already undercut by lower output in Southeast Asia and Latin America.

Edible oil buyers, including price-sensitive consumers in South Asia and Africa, will bear the brunt of the supply-side constraints that come just as demand is forecast to climb, with China easing COVID-19 controls and India boosting purchases.

Indonesia's new restrictions are another challenge for food-importing countries hurting from last year's red-hot inflation, which pushed prices of key staples wheat, corn and soybeans to all-time or multi-year highs.

"The implementation of (the) B35 mandate in Indonesia in 2023 definitely changes (the) global palm oil SND (supply and demand) situation," said Oscar Tjakra, a senior analyst at food and agribusiness research at Rabobank.

"I'm now expecting global palm oil SND will be in a slight deficit."

Indonesia's B35 mandate, the highest in the world, stipulates diesel sold in the country from Feb. 1 has to contain 35% palm-based fatty acid methyl ester. By comparison, Malaysia has partially implemented a 20% biodiesel blending mandate and other countries have measures calling for single and double digit percentages of bio content for diesel or gasoline.


The Indonesia Biofuel Producers Association says the B35 mandate will take up 11.44 million tonnes in palm oil this year, up from 9.6 million in 2022 under the country's B30 measure.

Indonesia, producer of more than half of global palm oil supplies, also tightened trade rules this year, allowing exporters to ship just six times their domestic palm oil sales volume, less than a fourth-quarter 2022 ratio of eight times.

"Indonesian palm oil export definitely will drop, as output will decline, domestic consumption will increase," Fadhil Hasan, an Indonesian Palm Oil Association (GAPKI) official, told Reuters.

Indonesia produced 51.3 million tonnes of palm oil in 2022 and exported 33.7 million, GAPKI estimated. In 2023, palm oil output is expected at 50.82 million tonnes and exports 26.42 million, it said.

On Thursday, Malaysia said it could stop exporting palm oil to the European Union in response to a new EU law aimed at protecting forests by strictly regulating sales of the product.

Malaysian benchmark palm oil futures are expected in a range of 4,000-4,200 ringgit ($920-$970) per tonne this year, according to the Malaysian Palm Oil Board Director General Ahmad Parveez Ghulam Kadir.

That's lower than a record average of 4,910 ringgit in 2022, with prices skewed higher by disruption to edible oil supplies and distribution by Russia's invasion of Ukraine. But it's still comparatively high. Prices averaged 3,260 ringgit a tonne between 2018 and 2022.

On Friday, Malaysian palm futures were trading near a three-week low around 3,860 ringgit.

Other threats to edible oil supplies include Argentina's worst drought in 60 years, which is forecast to cut its soybean output to 41 million tonnes, down from 48 million previously estimated.

STRONG DEMAND​

India's palm oil imports in December jumped 94% from a year earlier to a record high as the product's higher discount to rival vegetable oils led refiners to boost purchases.

"Palm oil's discount to rival oils is around $300 a tonne, we expect this discount to narrow to around $200 by March," said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage.

"But India's strong demand for palm oil will continue as it is still the cheapest edible oil."

Palm oil purchases by China, the world's second-largest importer, are also expected to climb this year, after dropping sharply in 2022 because of Beijing's then strict COVID controls.

($1 = 4.3350 ringgit)

Indonesia palm oil export curbs, biodiesel plans to hit world vegoil supplies

A move by top palm oil exporter Indonesia to restrict shipments and boost domestic biodiesel consumption is set to squeeze global vegetable oil supplies already undercut by lower output in Southeast Asia and Latin America.

www.reuters.com

 

[Indos]

Government Implements B35 Biodiesel Starting Tomorrow, Pertamina Will Absorb 9.9 Million KL​

Stories from Tempo.co • 3 hours ago

TEMPO.CO, Jakarta - Pertamina Patra Niaga will absorb B35 biodiesel of 9.9 million kilo liters (KL) in 2023. Previously, Pertamina also absorbed 8.5 million KL of fuel from the B25 biodiesel program.

"For Pertamina, we must prepare this as well as possible. We will prepare hoarding facilities because of the large amount of 9.9 million KL," said Pertamina Patra Niaga Director Alfian Nasution at the 'B35 Implementation for Energy Independence Towards an Even and Just Energy Transition' event at the Ministry of Economic Affairs or Coordinating Ministry for the Economy, Tuesday, January 31, 2023.

"We will prepare the reception well, along with the quality control system," he added.

Read: Starting Tomorrow, the Government Applies B35 Biodiesel

To facilitate distribution, Alfian continued, Pertamina will simplify the terminal. From 112 terminals for biodiesel distribution will be simplified to 17 terminals. This is intended to facilitate distribution by the Indonesian Biofuel Producers Association (Aprobi).

"Of the remaining 17 terminals, it is Pertamina's responsibility to reach the other 112 terminals," said Alfian.

The government will implement the B35 program starting tomorrow Wednesday, February 1, 2023. B35 is a fuel with a percentage of mixing crude palm oil (CPO)-based biofuels (BBN) of 65 percent into diesel fuel oil (BBM) of 35 percent.

"B35 will soon be included in all national transportation that uses biodiesel fuel," said Deputy for Food and Agribusiness Coordination of the Ministry of Economy Musdhalifah Maschmud at the Coordinating Ministry for Economic Affairs, Tuesday, January 31, 2023.

"It is estimated that the allocation of biodiesel will be 13.15 million kilo liters," he said.

Pemerintah Terapkan Biodiesel B35 Mulai Besok, Pertamina Bakal Serap 9,9 Juta KL

 

[Indos]

Indonesia 2023 gasoline demand, imports likely to exceed 2022 records​

By Mohi Narayan

Feb 2 (Reuters) - Gasoline consumption and imports in Indonesia, Asia's largest importer of the motor fuel, could hit records this year as the nation recovers from COVID-related travel curbs, although growth is expected to slow slightly along with its economy.

A spike in Indonesian imports would tighten the regional gasoline market and likely boost Asian refinery margins for the fuel. It could also accelerate plans for adding methanol and ethanol to gasoline to reduced its reliance on overseas supplies, a biofuel initiative that would add to the country's already extensive adoption of biodiesel. GL92-SIN-CRK

Indonesia's gasoline consumption is headed for an all-time high of 670,000 barrels per day (bpd) in 2023, up from a record 635,000 bpd in 2022, consultancy Rystad Energy said.
"Post-COVID recovery is the main driver behind the growth of gasoline demand," said Sofia Guidi Di Sante, a senior oil markets analyst at Rystad Energy.

"We have factored in a milder growth rate due to the plausible repercussions of a potential global recession."

Consultancy Wood Mackenzie said Indonesia's gasoline imports surpassed pre-pandemic levels last year at 380,000 bpd, a historic high based on data that goes back to 2010. This could rise to 390,000 to 400,000 bpd this year, WoodMac said.

Refinitiv Oil Research estimated imports at about 15 million tonnes (345,000 bpd) for 2022, up from around 11.5 million tonnes in 2021.

"Demand is still expected to be robust with (Indonesia's) strong economic growth and mobility," said Ranice Tan, a research analyst at WoodMac.

"However, growth is expected to slow down due to several fuel price increases last year (to contain ballooning subsidies) and potential recessionary effects."

Indonesia raised subsidised fuel prices by about 30% in early September as the government moved to rein in increasing costs to its budget.

Still, government subsidies, which make up about half the retail price of gasoline, have softened the blow of skyrocketing energy prices for consumers, Tan said.

And this year the government has increased the volume of subsidised gasoline for distribution.
Sales of subsidised gasoline stood at 29.81 million kl (513,700 bpd) in 2022, according to estimates by Indonesia's downstream oil and gas regulator BPH Migas, said Saleh Abdurrahman, a committee member at the regulator.

This year, BPH Migas has allocated 32.56 million kl of subsidised gasoline for distribution, it said in a statement.

(Reporting by Mohi Narayan in New Delhi; Additional reporting by Fransiska Nangoy in Jakarta; Editing by Florence Tan and Tom Hogue)

((Mohi.Narayan@thomsonreuters.com)