Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allowance decree was awaited by market

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

Palm oil benchmark agreement 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while giving the market up until the end of next month to adjust to the greater level of the fuel in the mix.

Indonesia, the world’s largest exporter of palm oil, had actually planned to release the mandatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.

“The ministerial regulation has actually been signed,” the minister Bahlil Lahadalia informed reporters, including the federal government was working to increase the obligatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, stated biodiesel manufacturers and fuel sellers will be offered up until Feb. 28 to adapt to the B40 mix. She stated the delay was due to the fact that of technical difficulties linked to aids for the fuel.

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

Fuel merchants and biodiesel producers had stated they were unable to draw up contracts for biodiesel distribution without the decree.

The biodiesel allowance for 2025 showed a boost from 2024’s estimated 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 mass transit, whose sales will be subsidised by the country’s palm oil fund.

“The remaining allotments will be offered at market value. The non-PSO allowance is set at 8.07 million KL,” Bahlil said, including the fund might not subsidise the cost space in between the palm oil and nonrenewable fuel sources for the general allowance.

BPDPKS, the agency in charge of gathering and managing the palm oil funds, approximated in November B40 would a 68% aid boost.

To assist finance that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the current 7.5%, but for that to occur, 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)