Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Biodiesel allowance decree was awaited by industry
Indonesia had actually prepared to launch higher biodiesel mix on Jan. 1
Palm oil standard 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while offering the industry until the end of next month to adapt to the higher level of the fuel in the mix.
Indonesia, the world's biggest exporter of palm oil, had planned to launch the mandatory 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 compulsory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, stated biodiesel producers and fuel merchants will be given up until Feb. 28 to adjust to the B40 mix. She stated the delay was due to the fact that of technical difficulties to subsidies for the fuel.
The non-implementation on Jan. 1. had actually caused a 2.6% drop in the Malaysian palm oil criteria agreement on Thursday. On Friday, it recovered by around 1%.
Fuel merchants and biodiesel manufacturers had stated they were not able to draw up contracts for biodiesel circulation without the decree.
The biodiesel allocation for 2025 indicated an increase from 2024's approximated 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 nation's palm oil fund.
"The staying allocations will be sold at market value. The non-PSO allotment is set at 8.07 million KL," Bahlil said, including the fund could not subsidise the rate gap in between the palm oil and fossil fuels for the total allocation.
BPDPKS, the firm in charge of collecting and handling the palm oil funds, estimated in November B40 would require a 68% aid boost.
To help finance that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the existing 7.5%, but for that to take place, another official policy is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)