Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was waited for by market

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

Palm oil standard contract increased 1% after previous fall

Government intends 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 distribution, while giving the market till 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 obligatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.

« The ministerial guideline has actually been signed, » the minister Bahlil Lahadalia informed reporters, including the government was working to increase the obligatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior authorities, said biodiesel manufacturers and fuel sellers will be offered till Feb. 28 to adapt to the B40 mix. She stated the delay was due to the fact that of technical obstacles linked to subsidies for the fuel.

The non-implementation on Jan. 1. had actually caused a 2.6% drop in the Malaysian palm oil criteria contract on Thursday. On Friday, it recovered by around 1%.

Fuel retailers and biodiesel manufacturers had said they were not able to draw up contracts for biodiesel circulation without the decree.

The biodiesel allowance for 2025 showed a boost from 2024’s estimated biodiesel usage of 12.98 KL, ministry information showed on Friday.

Of the overall allowance for this year, 7.55 million KL is for the public service obligation (PSO), which such as public transportation, whose sales will be subsidised by the country’s palm oil fund.

« The staying allotments will be cost market cost. The non-PSO allocation is set at 8.07 million KL, » Bahlil said, including the fund might not subsidise the rate gap between the palm oil and fossil fuels for the total allowance.

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

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