Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Biodiesel allocation decree was waited for by market
Indonesia had actually planned to release greater biodiesel mix on Jan. 1
Palm oil benchmark agreement increased 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while giving the industry up until completion of next month to adjust to the higher 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 policy has been signed,” the minister Bahlil Lahadalia told reporters, adding the federal government was working to increase the necessary biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, said biodiesel producers and fuel merchants 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 connected to subsidies for the fuel.
The non-implementation on Jan. 1. had resulted in a 2.6% drop in the Malaysian palm oil benchmark agreement on Thursday. On Friday, it recovered by around 1%.
Fuel retailers and biodiesel producers had actually said they were not able to prepare contracts for biodiesel circulation without the decree.
The biodiesel allotment for 2025 showed an from 2024’s estimated biodiesel consumption of 12.98 KL, ministry information showed on Friday.
Of the total allocation for this year, 7.55 million KL is for the public service commitment (PSO), which covers sectors such as public transportation, whose sales will be subsidised by the nation’s palm oil fund.
“The staying allotments will be cost market rate. The non-PSO allocation is set at 8.07 million KL,” Bahlil stated, adding the fund might not subsidise the price space between the palm oil and fossil fuels for the total allotment.
BPDPKS, the agency in charge of gathering and managing the palm oil funds, estimated in November B40 would require a 68% aid increase.
To help finance 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 guideline is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)
