Indonesia’s plan to expand its biodiesel mandates from 1 January 2025 has raised concerns that it could curb global palm oil supplies.

Indonesia’s plan to expand its biodiesel blending ratio mandate from 1 January 2025 appears increasingly likely to be implemented gradually as industry players seek a phased-in implementation, analysts said.

Indonesia’s plan to increase the mandatory blending ratio of palm oil in biodiesel from 35 per cent to 40 per cent, known as the B40 directive, is a policy that has sparked a rise in palm futures and is likely to push up palm oil prices further in 2025.

While the Prabowo Subianto administration has repeatedly said the programme is expected to be fully operational by 2025, industry observers say cost and technical challenges could lead to implementation in only some parts of the country’s numerous archipelagos before it is fully implemented.

Eniya Listiani Dewi, a senior energy ministry official, said the mandatory increase would not be phased in gradually and that biodiesel producers were ready to supply higher blends.

Energy company Mabanaft has reached an agreement with shipping company Hapag-Lloyd to supply B30 marine biofuel.

On 12 December, Mabanaft’s Waltershof tank farm in the German port of Hamburg will make the first test delivery of 1,000 metric tonnes of B30 very low sulphur fuel oil (VLSFO) to the container ship Delaware Express.

The delivery, the company says, follows ‘extensive analyses of possible bio-constituents that Mabanaft could add to the B30 biofuel’.

All options were analysed for quality and potential to reduce greenhouse gas emissions.

The agreement with Hapag-Lloyd will initially supply 1,000 tonnes of B30.

More will be available in 2025.

HD Hyundai Oil Bank said on 12 December that it exported ultra-low sulphur bio marine oil to Taiwan shipping company Yang Ming for the first time among domestic refining companies.

Bio marine oil is an environmentally friendly fuel that blends biodiesel into existing fossil fuel-based marine oil. The International Maritime Organisation (IMO) has announced that it will be carbon neutral by 2050, and it is attracting attention as an alternative environmentally friendly fuel.

The advantage of biomarine oil is that, unlike other alternative fuels, there is no need to modify the ship’s engine and fuel supply system. This means that existing ship oil supply infrastructure can be utilised intact.

HD Hyundai Oilbank succeeded in supplying the oil to domestic shipping companies for the first time in July this year.

The bio-oil supplied this time was produced on the basis of ultra-low-sulfur heavy oil with a sulfur content of 0.5 percent or less. Since ships are not required to install desulphurisation equipment in order to meet the limit of sulphur oxide exhaust emission, the bio marine oil is more popular in the market than the high sulphur heavy oil based bio marine oil with high sulphur content.

HD Hyundai Oil Bank said, ‘Based on our differentiated logistics competitiveness, we will expand our supply to shipping companies in Japan, Singapore and Europe.’

The UK Trade Remedies Agency (TRA) has initiated a transitional review of Indonesia’s countervailing measures on biodiesel.

The measure, which was inherited from the EU, is due to expire on 10 December 2024.TRA’s review will examine the effectiveness of the measure in protecting UK biodiesel producers from unfair trade practices associated with subsidies provided to Indonesian biodiesel producers.

The review period will focus on imports between 1 October 2023 and 30 September 2024.

Currently, imports of biodiesel from Indonesia are subject to tariffs ranging from 8 to 18 per cent.

Businesses potentially affected by this measure have until 23 December to register their interest through our public documents. Stakeholders registering after this date may not be able to fully participate in the review.

The Korea Times reports that HD Hyundai Oilbank’s biofuels business is achieving important milestones to meet increasingly sophisticated market demand.

The refinery said it completed Korea’s first biodiesel plant using supercritical fluid technology in April and is now in commercial operation. The plant reportedly aims to produce 130,000 tonnes of biodiesel per year.

The company blends biodiesel into diesel products for sale to the domestic market to comply with South Korea’s renewable fuel blending obligation. This year’s regulations call for a blending ratio of 4 per cent, an increase of 0.5 percentage points from last year.

HD Hyundai Oilbank said it is also looking at plans to build a dedicated SAF production facility using hydrogenated vegetable oil in 2027.

In Singapore, the shipping industry is increasingly using biofuels such as fatty acid methyl esters (FAME). However, concerns have arisen about the legality of biofuels and whether they are truly sustainable.

Industry bodies have found a growing number of cases of mislabelling of biofuels purportedly made from recycled fats and oils, while suspicions remain that these biofuels may be made from cheaper, less sustainable virgin oils.

To address these issues, FAME fingerprint recognition can be used as a potential tool to detect fraud in the bunker supply chain and ensure the authenticity of biofuels. By providing a physical verification method that complements existing certification schemes, FAME Fingerprint Recognition can help demonstrate that the Green Premium has real environmental benefits and maintain the integrity of the bunker supply chain.

FAME fingerprinting is based on the principle that the fatty acid profile of a FAME is unique to its feedstock and can be retained during the esterification of the feedstock to produce the FAME. The ‘fingerprint’ can then be compared to a database of known fatty acid profiles to identify the source of the feedstock.
GCMD, in collaboration with VPS, modified an existing fuel testing method to analyse samples using a gas chromatograph with flame ionisation detection, a common instrument in fuel testing laboratories.

The German government is under pressure to stop imports of contaminated Chinese biofuels that threaten local industries.

A loose coalition of German biofuel makers, environmentalists and lawmakers want the government to set up a system of inspections and sanctions by 1 January to stem the tide of palm oil-blended biofuels.

Germany and the European Union banned the use of palm oil as a biofuel as early as 2023, while imports of biofuels from waste feedstocks have soared.

The US exported 18,718 metric tonnes of B30 or higher biodiesel and biodiesel blends in October, according to data released by the USDA’s Foreign Agricultural Service on 5 December. Biodiesel imports for the month reached 70,228.9 metric tonnes.

Biodiesel exports in October were 18,718 metric tonnes, down from 67,675.3 metric tonnes exported in September and 63,518.4 metric tonnes exported in October 2023.

Imports of B30 or higher grade biodiesel and biodiesel blends in October were 70,228.9 metric tonnes, down from 88,055.9 metric tonnes in September and 165,370.9 metric tonnes in October last year.