Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allowance decree was waited for by market

Indonesia had actually prepared to release greater biodiesel mix on Jan. 1

Palm oil benchmark contract rose 1% after previous fall

Government intends 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while giving the market up until completion of next month to adapt to the higher level of the fuel in the mix.

Indonesia, the world’s largest exporter of palm oil, had actually prepared to launch the obligatory 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 informed press reporters, adding the government was working to increase the compulsory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel producers and fuel retailers will be given up until Feb. 28 to adjust to the B40 mix. She stated the hold-up was due to the fact that of technical difficulties connected to aids for the fuel.

The non-implementation on Jan. 1. had actually caused a 2.6% drop in the oil benchmark contract on Thursday. On Friday, it recovered by around 1%.

Fuel retailers and biodiesel producers had said they were unable to draw up contracts 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 information showed on Friday.

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

“The staying allowances will be offered at market value. The non-PSO allotment is set at 8.07 million KL,” Bahlil said, including the fund might not subsidise the cost space in between the palm oil and fossil fuels for the general allocation.

BPDPKS, the firm in charge of gathering and handling the palm oil funds, approximated in November B40 would need a 68% subsidy increase.

To help fund that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the current 7.5%, however for that to happen, another main regulation is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)