KONTAN.CO.ID - NUSA DUA, Indonesia. Indonesia's chief economic minister Airlangga Hartarto said on Thursday he is confident palm oil production can be boosted in coming years to meet the country's rising demand for biofuel.

Indonesia's mandated biodiesel blend will rise to require a 40% palm oil-based fuel next year, up from 35% at present.

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Increasing the mandatory mix to 40% may result in palm oil used for energy rising to 13.9 million metric tons, from the estimated 11 million tons needed this year with B35, Indonesia's biofuel producers association APROBI had previously estimated.

Production of the vegetable oil in Indonesia has been stagnant in recent years due to aging trees.

The government is enhancing the smallholder's palm oil replanting programme to meet the higher demand, Airlangga told participants at Indonesia Palm Oil Conference.

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Since 2017, Indonesia has provided funds for smallholders to replant 360,000 hectares (890,000 acres), he said, adding the government is pushing for improved farming practices to increase yields.

The replanting programme has been behind schedule. The launch target was to replant 180,000 hectare each year.

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Editor: Yudho Winarto