Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was awaited by market


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


Palm oil benchmark agreement increased 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 till the end of next month to adjust to the higher level of the fuel in the mix.


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


"The ministerial guideline has actually been signed," the minister Bahlil Lahadalia told reporters, including the government was working to increase the necessary biodiesel mix to 50% next year.


Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel manufacturers and fuel merchants will be given till Feb. 28 to adjust to the B40 mix. She said the hold-up was because of technical difficulties connected to subsidies for the fuel.


The non-implementation on Jan. 1. had resulted in a 2.6% drop in the Malaysian palm oil standard contract on Thursday. On Friday, it recuperated by around 1%.


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


The biodiesel allocation for 2025 suggested a boost from 2024's estimated biodiesel intake of 12.98 KL, ministry data showed on Friday.


Of the total allotment for this year, 7.55 million KL is for the public service responsibility (PSO), which covers sectors such as mass transit, whose sales will be subsidised by the country's palm oil fund.


"The staying allowances will be cost market price. The non-PSO allotment is set at 8.07 million KL," Bahlil said, including the fund might not subsidise the rate gap between the palm oil and fossil fuels for the general allowance.


BPDPKS, the firm in charge of gathering and managing the palm oil funds, approximated in November B40 would require a 68% subsidy increase.


To assist fund that, Indonesia plans to increase its export levy for unrefined palm oil (CPO) to 10% from the present 7.5%, however for that to take place, 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)