Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allowance decree was waited for by industry


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


Palm oil criteria agreement rose 1% after previous fall


Government goes for 50% biodiesel mix in 2026


(Recasts with energy minister's remark)


By Bernadette Christina and Fransiska Nangoy


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


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


"The ministerial policy has been signed," the minister Bahlil Lahadalia told press reporters, including the federal government was working to increase the mandatory biodiesel mix to 50% next year.


Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel producers and fuel merchants will be offered up until Feb. 28 to adjust to the B40 mix. She stated the hold-up was due to the fact that of technical obstacles linked to subsidies for the fuel.


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


Fuel sellers and biodiesel producers had actually said they were not able to prepare agreements for biodiesel distribution without the decree.


The biodiesel allowance for 2025 indicated a boost from 2024's estimated biodiesel intake of 12.98 KL, ministry information showed on Friday.


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


"The staying allotments will be offered at market value. The non-PSO allowance is set at 8.07 million KL," Bahlil stated, adding the fund might not subsidise the price space between the palm oil and nonrenewable fuel sources for the general allocation.


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


To assist finance that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, however for that to take place, another main guideline is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)