Biodiesel allocation decree was awaited by market
Indonesia had prepared to release greater biodiesel mix on Jan. 1
Palm oil standard contract increased 1% after previous fall
Government goes 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 designating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while offering the industry until completion of next month to adjust to the higher level of the fuel in the mix.
Indonesia, the world's biggest exporter of palm oil, had actually prepared to release the compulsory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial regulation has been signed," the minister Bahlil Lahadalia told press reporters, adding the federal government was working to increase the obligatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, said biodiesel producers and fuel merchants will be provided up until Feb. 28 to adapt to the B40 mix. She stated the delay was because of technical challenges linked to subsidies for the fuel.
The non-implementation on Jan. 1. had actually caused a 2.6% drop in the Malaysian palm oil standard contract on Thursday. On Friday, it recovered by around 1%.
Fuel merchants and biodiesel manufacturers had actually said they were unable to draw up agreements for biodiesel distribution without the decree.
The biodiesel allowance for 2025 indicated an increase from 2024's approximated biodiesel consumption of 12.98 KL, ministry information revealed on Friday.
Of the overall allotment for this year, 7.55 million KL is for the general public service obligation (PSO), which covers sectors such as public transport, whose sales will be subsidised by the oil fund.
"The staying allotments will be sold at market rate. The non-PSO allotment is set at 8.07 million KL," Bahlil said, adding the fund might not subsidise the rate gap between the palm oil and fossil fuels for the total allotment.
BPDPKS, the company in charge of gathering and handling the palm oil funds, approximated in November B40 would need a 68% subsidy increase.
To help finance that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, however for that to occur, another official guideline is required. (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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