Biodiesel allowance decree was waited for by industry
Indonesia had prepared to launch greater 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 comment)
By Bernadette Christina and Fransiska Nangoy
JAKARTA, Jan 3 (Reuters) - Indonesia Energy and Mineral Resources Minister signed a decree on Friday designating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while giving the industry till 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 launch 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 reporters, adding the federal 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 given up until Feb. 28 to adjust to the B40 mix. She said the delay was since of technical challenges connected to subsidies for the fuel.
The non-implementation on Jan. 1. had actually led to a 2.6% drop in the Malaysian palm oil criteria contract on Thursday. On Friday, it recovered by around 1%.
Fuel retailers and biodiesel manufacturers had actually stated they were not able to prepare agreements for biodiesel circulation without the decree.
The biodiesel allowance for 2025 suggested an increase from 2024's estimated biodiesel intake of 12.98 KL, ministry data revealed on Friday.
Of the total 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 country's palm oil fund.
"The remaining allocations will be sold at market value. The non-PSO allocation is set at 8.07 million KL," Bahlil said, adding the fund might not subsidise the cost space in between the palm oil and nonrenewable fuel for the general allocation.
BPDPKS, the firm in charge of collecting and handling the palm oil funds, estimated in November B40 would need a 68% aid increase.
To assist 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 happen, another main guideline 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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