Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allowance decree was awaited by industry


Indonesia had prepared to higher biodiesel mix on Jan. 1


Palm oil benchmark 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while offering the market up until 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 actually prepared to launch the necessary 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 informed press reporters, adding the federal government was working to increase the necessary biodiesel mix to 50% next year.


Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel producers and fuel merchants will be given until Feb. 28 to adjust to the B40 mix. She said the hold-up was due to the fact that of technical difficulties linked to aids for the fuel.


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


Fuel sellers and biodiesel manufacturers had stated they were not able to prepare contracts for biodiesel distribution without the decree.


The biodiesel allotment for 2025 showed an increase from 2024's estimated biodiesel consumption of 12.98 KL, ministry data revealed on Friday.


Of the overall 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 remaining allocations will be sold at market value. The non-PSO allocation is set at 8.07 million KL," Bahlil said, including the fund could not subsidise the rate gap between the palm oil and fossil fuels for the general allocation.


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


To help finance that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, however for that to take place, another main policy is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)