Biodiesel allocation decree was awaited by industry
Indonesia had planned to launch greater biodiesel mix on Jan. 1
Palm oil benchmark agreement 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 designating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while offering the market until of next month to adjust to the greater level of the fuel in the mix.
Indonesia, the world's biggest exporter of palm oil, had actually planned to release the compulsory 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 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 producers and fuel merchants will be offered till Feb. 28 to adapt to the B40 mix. She stated the hold-up was because of technical challenges linked to subsidies for the fuel.
The non-implementation on Jan. 1. had resulted in a 2.6% drop in the Malaysian palm oil criteria agreement on Thursday. On Friday, it recovered by around 1%.
Fuel retailers and biodiesel manufacturers had said they were not able to prepare contracts for biodiesel circulation without the decree.
The biodiesel allotment for 2025 indicated an increase from 2024's approximated biodiesel intake of 12.98 KL, ministry information showed on Friday.
Of the total allowance for this year, 7.55 million KL is for the public service commitment (PSO), which covers sectors such as public transportation, whose sales will be subsidised by the country's palm oil fund.
"The remaining allowances will be cost market cost. The non-PSO allowance is set at 8.07 million KL," Bahlil stated, adding the fund could not subsidise the price space in between the palm oil and nonrenewable fuel sources for the overall allotment.
BPDPKS, the agency in charge of gathering and managing the palm oil funds, estimated in November B40 would require a 68% subsidy boost.
To help fund that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the current 7.5%, however for that to occur, another official policy is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati
1
Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Joseph Burt edited this page 5 months ago