Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allotment decree was waited for by industry


Indonesia had actually planned to launch higher biodiesel mix on Jan. 1


Palm oil standard agreement rose 1% after previous fall


Government intends 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while providing the market until 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 introduce the mandatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.


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


Eniya Listiani Dewi, a ministry senior authorities, said biodiesel manufacturers and fuel merchants will be offered up until Feb. 28 to adjust to the B40 mix. She stated the delay was due to the fact that of technical difficulties linked to aids for the fuel.


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


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


The biodiesel allowance for 2025 indicated an increase from 2024's approximated biodiesel intake of 12.98 KL, ministry information revealed on Friday.


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


"The staying allowances will be cost market value. The non-PSO allowance is set at 8.07 million KL," Bahlil said, adding the fund could not subsidise the cost gap in between the palm oil and nonrenewable fuel sources for the overall allotment.


BPDPKS, the firm in charge of collecting and handling the palm oil funds, estimated in November B40 would need a 68% aid boost.


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