Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allotment decree was waited for by industry

Indonesia had prepared to introduce greater biodiesel mix on Jan. 1

Palm oil standard contract rose 1% after previous fall

Government aims 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while providing the market till the end of next month to adapt to the greater level of the fuel in the mix.

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

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

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

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

Fuel retailers and biodiesel producers had actually said they were unable to draw up agreements for biodiesel circulation without the decree.

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

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

“The staying allowances will be sold at market price. The non-PSO allowance is set at 8.07 million KL,” Bahlil stated, including the fund could not subsidise the rate space between the palm oil and nonrenewable fuel sources for the general allowance.

BPDPKS, the agency in charge of and managing the palm oil funds, estimated in November B40 would need a 68% subsidy increase.

To assist fund that, Indonesia plans to increase its export levy for unrefined palm oil (CPO) to 10% from the present 7.5%, but for that to take place, another official guideline is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)