Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was waited for by market


Indonesia had actually planned to release higher biodiesel mix on Jan. 1


Palm oil criteria contract rose 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while providing the market until completion 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 actually planned to release 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, adding the government was working to increase the mandatory biodiesel mix to 50% next year.


Eniya Listiani Dewi, a ministry senior authorities, 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 challenges linked to subsidies for the fuel.


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


Fuel merchants and biodiesel manufacturers had said they were unable to prepare contracts for biodiesel circulation without the decree.


The biodiesel allotment for 2025 indicated a boost from 2024's estimated biodiesel consumption of 12.98 KL, ministry information revealed on Friday.


Of the overall allowance 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 nation's palm oil fund.


"The staying allowances will be offered at market price. The non-PSO allotment is set at 8.07 million KL," Bahlil said, adding the fund could not subsidise the cost gap in between the palm oil and fossil fuels for the general allowance.


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


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