Biodiesel allowance decree was awaited by market
Indonesia had planned to introduce greater biodiesel mix on Jan. 1
Palm oil benchmark contract rose 1% after previous fall
Government goes for 50% biodiesel mix in 2026
(Recasts with energy minister's remark)
By Bernadette Christina and 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 giving the market until 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 actually planned to launch the obligatory 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, including the federal government was working to increase the compulsory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, said biodiesel manufacturers and fuel merchants will be given until Feb. 28 to adapt to the B40 mix. She said the hold-up was because of technical obstacles linked to aids for the fuel.
The non-implementation on Jan. 1. had resulted in a 2.6% drop in the Malaysian palm oil benchmark agreement on Thursday. On Friday, it recuperated by around 1%.
Fuel merchants and biodiesel producers had actually said they were unable to prepare agreements for biodiesel circulation without the decree.
The biodiesel allotment for 2025 showed a boost from 2024's estimated biodiesel consumption of 12.98 KL, ministry data revealed on Friday.
Of the overall allotment for this year, 7.55 million KL is for the general public service commitment (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country's palm oil fund.
"The staying allowances will be sold at market cost. The non-PSO allocation 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 allowance.
BPDPKS, the agency in charge of collecting and managing the palm oil funds, approximated in November B40 would need a 68% aid boost.
To assist fund that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, but for that to take place, another official guideline 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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