Biodiesel allotment decree was waited for by market
Indonesia had actually planned to release higher biodiesel mix on Jan. 1
Palm oil criteria agreement increased 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while providing the industry up until the end of next month to adapt to the higher level of the fuel in the mix.
Indonesia, the world's biggest exporter of palm oil, had prepared to launch the obligatory 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 press reporters, including the government was working to increase the obligatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, stated biodiesel manufacturers 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 difficulties linked to aids 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 manufacturers had said they were not able to prepare contracts for biodiesel distribution without the decree.
The biodiesel allotment for 2025 suggested a boost from 2024's approximated biodiesel consumption of 12.98 KL, ministry data revealed on Friday.
Of the total allowance 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 remaining allowances will be offered at market value. The non-PSO allotment is set at 8.07 million KL," Bahlil stated, adding the fund could not subsidise the cost space in between the palm oil and nonrenewable fuel sources for the overall allowance.
BPDPKS, the agency in charge of collecting and handling the palm oil funds, approximated in November B40 would require a 68% subsidy boost.
To help finance that, Indonesia plans to increase its export levy for unrefined palm oil (CPO) to 10% from the 7.5%, but for that to happen, another official regulation is required. (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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