Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allotment decree was awaited by market

Indonesia had planned to launch greater biodiesel mix on Jan. 1

Palm oil benchmark contract rose 1% after previous fall

Government aims 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while giving the industry till completion of next month to adapt to the greater level of the fuel in the mix.

Indonesia, the world’s biggest exporter of palm oil, had planned to the compulsory 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, adding the government was working to increase the mandatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, said biodiesel producers and fuel sellers will be given until Feb. 28 to adjust to the B40 mix. She said the delay was due to the fact that of technical challenges linked to aids for the fuel.

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

Fuel merchants and biodiesel manufacturers had actually said they were not able to prepare agreements for biodiesel circulation without the decree.

The biodiesel allocation for 2025 suggested an increase from 2024’s approximated biodiesel usage of 12.98 KL, ministry information revealed on Friday.

Of the total allotment for this year, 7.55 million KL is for the 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 cost market value. The non-PSO allocation is set at 8.07 million KL,” Bahlil stated, including the fund might not subsidise the rate gap in between the palm oil and nonrenewable fuel sources for the overall allocation.

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

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