Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was waited for by market


Indonesia had prepared to introduce higher biodiesel mix on Jan. 1


Palm oil standard contract rose 1% after previous fall


Government goes for 50% biodiesel mix in 2026


(Recasts with energy minister's comment)


By Bernadette Christina and Fransiska Nangoy


JAKARTA, Jan 3 (Reuters) - Indonesia Energy and Mineral Resources Minister signed a decree on Friday assigning 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while offering the industry until the end of next month to adapt to the greater level of the fuel in the mix.


Indonesia, the world's biggest exporter of palm oil, had actually prepared to introduce the necessary requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.


"The ministerial regulation has been signed," the minister Bahlil Lahadalia informed reporters, adding the government was working to increase the necessary biodiesel mix to 50% next year.


Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel producers and fuel merchants will be provided till Feb. 28 to adapt to the B40 mix. She stated the delay was due to the fact that of technical obstacles linked to subsidies for the fuel.


The non-implementation on Jan. 1. had actually led to a 2.6% drop in the Malaysian palm oil standard agreement on Thursday. On Friday, it recovered by around 1%.


Fuel sellers and biodiesel producers had stated they were unable to prepare contracts for biodiesel distribution without the decree.


The biodiesel allocation for 2025 indicated an increase from 2024's approximated biodiesel usage of 12.98 KL, ministry data showed on Friday.


Of the overall allocation for this year, 7.55 million KL is for the general public service obligation (PSO), which covers sectors such as public transportation, whose sales will be subsidised by the country's palm oil fund.


"The remaining allocations will be cost market cost. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, including the fund could not subsidise the cost space in between the palm oil and fossil fuels for the total allocation.


BPDPKS, the agency in charge of gathering and handling the palm oil funds, estimated in November B40 would require a 68% .


To help fund that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the current 7.5%, however for that to happen, another official policy is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)