Biodiesel allotment decree was waited for by industry
Indonesia had actually planned to introduce higher biodiesel mix on Jan. 1
Palm oil benchmark contract rose 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 distribution, while giving the market 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 actually prepared to release the necessary 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 press reporters, adding the government was working to increase the mandatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, stated biodiesel producers and fuel sellers will be offered till Feb. 28 to adjust to the B40 mix. She said the delay was since of technical obstacles connected to subsidies for the fuel.
The non-implementation on Jan. 1. had actually caused a 2.6% drop in the Malaysian palm oil benchmark contract on Thursday. On Friday, it recovered by around 1%.
Fuel retailers and biodiesel manufacturers had stated they were not able to draw up contracts for biodiesel distribution without the decree.
The biodiesel allotment for 2025 suggested an increase from 2024's approximated biodiesel usage of 12.98 KL, ministry data showed 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 public transportation, whose sales will be subsidised by the country's palm oil fund.
"The remaining allocations will be cost market price. The non-PSO allowance is set at 8.07 million KL," Bahlil said, including the fund might not subsidise the between the palm oil and nonrenewable fuel sources for the total allocation.
BPDPKS, the company in charge of gathering and managing the palm oil funds, estimated in November B40 would require a 68% aid increase.
To assist fund that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, but for that to happen, another official regulation 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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