Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allotment decree was awaited by industry


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


Palm oil standard agreement increased 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 designating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while offering the market up until completion 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 prepared to introduce the compulsory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.


"The ministerial policy has actually been signed," the minister Bahlil Lahadalia told reporters, adding the federal government was working to increase the obligatory biodiesel mix to 50% next year.


Eniya Listiani Dewi, a ministry senior official, stated biodiesel producers and fuel merchants will be given till Feb. 28 to adapt to the B40 mix. She said the hold-up was since of technical challenges linked to aids for the fuel.


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


Fuel merchants and biodiesel producers had stated they were not able to draw up contracts for biodiesel distribution without the decree.


The biodiesel allocation for 2025 suggested an increase from 2024 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 commitment (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country's palm oil fund.


"The staying allowances will be cost market value. The non-PSO allowance is set at 8.07 million KL," Bahlil stated, including the fund could not subsidise the price gap between the palm oil and fossil fuels for the overall allowance.


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


To help fund that, Indonesia plans to increase its export levy for unrefined palm oil (CPO) to 10% from the current 7.5%, but for that to occur, another main policy is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)