Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was awaited by industry

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

Palm oil benchmark agreement increased 1% after previous fall

Government intends 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 circulation, while offering the market till completion of next month to adapt to the greater level of the fuel in the mix.

Indonesia, the world’s largest 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 regulation has actually been signed,” the minister Bahlil Lahadalia told 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 producers and fuel sellers will be offered until Feb. 28 to adapt to the B40 mix. She stated the hold-up 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 benchmark agreement on Thursday. On Friday, it recuperated by around 1%.

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

The biodiesel allocation for 2025 suggested an increase from 2024’s estimated biodiesel intake of 12.98 KL, ministry information revealed on Friday.

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

“The remaining allocations will be offered 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 total .

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

To assist fund that, Indonesia plans 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 required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)