Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allotment decree was waited for by market


Indonesia had prepared to release higher biodiesel mix on Jan. 1


Palm oil standard 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while giving the market up until the end 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 press reporters, including the federal government was working to increase the mandatory biodiesel mix to 50% next year.


Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel producers and fuel sellers will be offered up until Feb. 28 to adapt to the B40 mix. She said the delay was because of technical difficulties connected to aids for the fuel.


The non-implementation on Jan. 1. had actually caused a 2.6% drop in the Malaysian palm oil criteria agreement on Thursday. On Friday, it recuperated by around 1%.


Fuel retailers and biodiesel producers had actually said they were not able to prepare agreements for biodiesel distribution without the decree.


The biodiesel allowance for 2025 suggested an increase from 2024's estimated biodiesel usage of 12.98 KL, ministry data showed on Friday.


Of the overall allocation for this year, 7.55 million KL is for the general public service (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country's palm oil fund.


"The staying allotments will be offered at market cost. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, adding the fund could not subsidise the price gap in between the palm oil and fossil fuels for the general allocation.


BPDPKS, the agency in charge of collecting and managing the palm oil funds, estimated in November B40 would require a 68% subsidy boost.


To help finance 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 guideline is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)