Biodiesel allowance decree was waited for by industry
Indonesia had planned to launch greater biodiesel mix on Jan. 1
Palm oil benchmark contract 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 circulation, while the market up until the end of next month to adjust to the greater level of the fuel in the mix.
Indonesia, the world's biggest exporter of palm oil, had actually prepared to release the obligatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial regulation has actually been signed," the minister Bahlil Lahadalia informed reporters, including the federal government was working to increase the compulsory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel manufacturers and fuel merchants will be offered until Feb. 28 to adapt to the B40 mix. She stated the delay was because of technical difficulties linked to subsidies for the fuel.
The non-implementation on Jan. 1. had actually caused a 2.6% drop in the Malaysian palm oil criteria contract on Thursday. On Friday, it recuperated by around 1%.
Fuel retailers and biodiesel manufacturers had actually said they were unable to draw up contracts for biodiesel circulation without the decree.
The biodiesel allowance for 2025 indicated a boost from 2024's estimated biodiesel consumption of 12.98 KL, ministry information showed on Friday.
Of the total allocation for this year, 7.55 million KL is for the general public service obligation (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country's palm oil fund.
"The remaining allotments will be sold at market value. The non-PSO allowance is set at 8.07 million KL," Bahlil stated, adding the fund could not subsidise the price gap between the palm oil and fossil fuels for the overall allocation.
BPDPKS, the firm in charge of collecting and handling the palm oil funds, approximated in November B40 would need a 68% aid boost.
To help fund that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the current 7.5%, however for that to occur, another official policy is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati
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Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
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