Linda Yulisman, Jakarta – Domestic biofuel producers are anticipating a rise in demand next year, possibly a triple increase, particularly following the recent issuance of a regulation that requires higher amounts of biodiesel in fuel blends.

Biofuel Producers Association (Aprobi) secretary general Paulus Tjakrawan predicted on Thursday that local demand might jump to 3.8 million kiloliters next year, up from 1.1 million kiloliters this year.

Out of that estimated volume, 3.5 million kiloliters will supply state-owned oil and gas firm PT Pertamina while the remaining 300,000 kiloliters will go to other companies, according to Paulus.

"In general, our production capacity is sufficient and we are ready to accommodate such a high increase in demand," Paulus told The Jakarta Post on the sidelines of a seminar hosted by the Industry Ministry.

The installed capacity of the domestic palm oil-based biodiesel industry, which comprises 23 firms, totaled 5.67 million kiloliters this year. In addition, the bioethanol industry, which uses cassava and molasses and relies on 13 producers, reached 272,730 kiloliters, according to the industry body.

The production of biodiesel alone is expected to hit 2.2 million kiloliters this year, up 20.88 percent from 1.82 million kiloliters last year. So far, most of the domestic biodiesel output is exported. This year, 69.7 percent of the total output will be exported.

However, the situation will soon change following the issuance of a regulation in August, which is partly aimed at reducing the oil imports that caused a staggering deficit in the country's trade balance.

From January to September this year, Indonesia posted a US$9.74 billion deficit from oil and gas trade, according to the recent data from the Central Statistics Agency (BPS).

Crude oil imports jumped 29.29 percent to $10.26 billion in the first three quarters of the year, contributing to an 8.5 percent increase in total oil and gas imports to $33.6 billion, which accounted for 23.94 percent of overall imports.

Under the Energy and Mineral Resources Ministerial Regulation, starting from September, various sectors including transportation, industry and energy, should raise their minimum use of biodiesel.

Power generators, for example, should use at least 7.5 percent of biodiesel, and the figure will climb to 20 percent next year. Private vehicles should also utilize 3 percent of biodiesel and the content will surge to 10 percent next year.

M. Suryadi Mardjoeki, head of gas and oil fuel division at the state-owned utility company PT PLN, said that in the last two months of this year, the company needed 26,000 kiloliters of biodiesel to supply a number of its diesel-fueled power plants.

Part of the necessity would be sourced through Pertamina, in addition to other companies through open tenders. "Currently, we are conducting trials in some of our diesel-fueled power plants in North Sumatra, Riau and West Kalimantan," he told the Post.

Suryadi added that as PLN would boost consumption of biodiesel in all diesel-fueled power plants next year, its demand might rise to 1.3 kiloliters.