Biodiesel allotment decree was waited for by market
Indonesia had prepared to launch 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while giving the industry until completion of next month to adjust to the greater level of the fuel in the mix.
Indonesia, the world's largest exporter of palm oil, had planned to release the obligatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial policy has actually been signed," the minister Bahlil Lahadalia informed reporters, including the government was working to increase the obligatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel manufacturers and fuel sellers will be given until Feb. 28 to adapt to the B40 mix. She said the delay was because of technical challenges linked to subsidies for the fuel.
The non-implementation on Jan. 1. had resulted in a 2.6% drop in the Malaysian palm oil benchmark agreement on Thursday. On Friday, it recuperated by around 1%.
Fuel retailers and biodiesel manufacturers had actually stated they were not able to prepare contracts for biodiesel circulation without the decree.
The biodiesel allotment for 2025 indicated an increase from 2024's estimated biodiesel usage of 12.98 KL, ministry information revealed on Friday.
Of the total allotment for this year, 7.55 million KL is for the public service obligation (PSO), which covers sectors such as public transport, whose sales will be subsidised by the nation's palm oil fund.
"The remaining allotments will be sold at market value. The non-PSO allotment is set at 8.07 million KL," Bahlil stated, including the fund might not subsidise the price gap in between the palm oil and fossil fuels for the general allowance.
BPDPKS, the company in charge of collecting and handling the palm oil funds, estimated in November B40 would need a 68% aid boost.
To help finance that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the present 7.5%, however for that to occur, another official guideline 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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