Biodiesel allotment decree was waited for by industry
Indonesia had prepared to launch greater biodiesel mix on Jan. 1
Palm oil benchmark agreement 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 distribution, while providing the market till completion 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 planned to introduce the mandatory 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 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 manufacturers and fuel sellers will be provided until Feb. 28 to adjust to the B40 mix. She stated the hold-up was due to the fact that of technical challenges linked to aids for the fuel.
The non-implementation on Jan. 1. had actually resulted in a 2.6% drop in the Malaysian palm oil standard agreement on Thursday. On Friday, it recuperated by around 1%.
Fuel sellers and biodiesel producers had said they were unable to prepare contracts for biodiesel circulation without the decree.
The biodiesel allowance for 2025 indicated a boost from 2024's approximated biodiesel consumption of 12.98 KL, ministry information showed on Friday.
Of the total allotment for this year, 7.55 million KL is for the general public service responsibility (PSO), which covers sectors such as public transport, whose sales will be subsidised by the nation's palm oil fund.
"The remaining allocations will be offered at market value. The non-PSO allotment is set at 8.07 million KL," Bahlil said, adding the fund could not subsidise the rate space between the palm oil and nonrenewable fuel sources for the general allotment.
BPDPKS, the firm in charge of collecting and managing the palm oil funds, estimated in November B40 would need a 68% aid increase.
To assist finance that, Indonesia plans to increase its export levy for oil (CPO) to 10% from the present 7.5%, however for that to happen, 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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