Indonesia aims to start making green diesel in 2022

 Indonesia plans to start producing green diesel from palm oil in 2022, with output estimated at 3.7 million kiloliters, a senior official in the Energy and Mineral Resources Ministry said.

Indonesia, the world’s largest palm oil producer, wants to develop green diesel, a second generation biodiesel. It currently uses biodiesel made from fatty acid methyl ester (FAME) from palm oil, which is blended with fossil fuel.

Green diesel can be made by refining fossil crude oil and palm derivatives together in a single process, or refining palm oil in dedicated refineries.

F.X. Sutijastoto, director general of renewable energy at the ministry, told a parliamentary hearing his estimate of 2022 production was based a on business plan by Indonesia’s state energy company PT Pertamina, although further studies were needed.

Pertamina is currently planning to develop refineries which can produce diesel from palm oil.

By 2024, Indonesia should be able to increase production to 6.1 million kiloliters, according to ministry data presented to parliament.

Sutijastoto said there seven companies were interested in building refineries to produce green diesel, including Wilmar International, a Singapore-based agribusiness firm.

From January, the country is set to bring in the mandatory use of B30 fuel, a biodiesel with 30% FAME blend. It would be expanded from the current 20% bio-content.

The B30 program has sparked palm price rally in recent months due to concerns that Indonesia will have less palm oil to export.

Indonesia is expected to consume 10.1 million kiloliters of FAME in 2022, ministry data showed on Tuesday.

President Joko Widodo sees the biodiesel program as a way of offsetting a current account deficit caused by large energy imports, while also supporting demand for palm oil, one of Indonesia’s main commodity exports.

Widodo has asked for further expansion of the biodiesel program and ordered studies on mixing palm-based fuel with jet fuel. (Writing by Fransiska Nangoy; Editing by Giles Elgood)

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