• Bloomberg reported that Indonesia aims to complete tests on a new biodiesel formula in 2021F. A government official said that the trial aims to mix 10% diesel made from pure vegetable oils into the B30 blending. The government will also test the new fuel in vehicles. Indonesia may apply fuel with 40% vegetable oils content in July 2021 if the tests are successful. An industry player said that the government needs to provide incentives to improve the price competitiveness of diesel made with 100% vegetable oil or D100, due to their higher production costs and raw material prices compared with B30.
• According to Bloomberg also, Indonesia’s plan to expand biodiesel production has been delayed by Covid-19. Originally, Indonesia had scheduled to expand is biodiesel production capacity by 30% this year. The plan was to increase 3.6mil kiloliters (3.1mil tonnes) of biodiesel production capacity this year from 11.6mil kiloliters (10.1mil tonnes) so that the country can prepare for B40 in 2022F. However, the capacity expansion plan has been delayed. Experts in machineries, testing and computer systems, who are based in Europe and Malaysia, have not been able to fly into Indonesia.
• In a related development, Reuters cited a government official as saying that Indonesia’s plans for B40 is back on schedule with a target for implementation by July 2021. Separately, the chief executive of the Estate Crop Fund said that B40 will be produced using a different formulation combining 30% fatty acid methyl ester and a 10% green diesel fuel made out of palm oil with conventional diesel. Indonesia produced B30 with a mix of fatty acid methyl ester with regular diesel but it has faced resistance from consumers who said that it is not compatible with their vehicles.
• Biodiesel Magazine reported that US production of biodiesel rose slightly in May from April as Covid-19 lockdowns remained in place for many states during the month even though a few other states began reopening towards the end of May. Biodiesel production in the USA hit 147mil gallons in May, which were four million gallons higher than April but four million gallons lower than in March. Midwestern biodiesel production accounted for 76% of the country’s output in May compared with 69% in April.
• MercoPress reported that Brazil’s soybean production in 2020E/2021F is expected to jump to a record 130mil tonnes as good prices drive farmers to increase planting. Industry experts said that a growth in harvested areas of almost 3% to 38mil hectares was driven by high profit margins and favourable exchange rates. The president of Aprosoja Brasil, a soybean producer association, said that almost 50% of the country’s soybean crops have been sold forward.

Source: AmInvest Research - 10 Aug 2020