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, yesterday 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.
Indonesia 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.
The ministry will submit recommendations for the B40 mandate after the tests are completed in December.
If implemented, the B40 mandate will add about 3.4 million to 3.5 million kilolitres of palm-based biodiesel to domestic consumption.
As of October, the country consumed about eight million kilolitres of biodiesel, out of an annual target of 11 million kilolitres. — Bloomberg