Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Biodiesel allowance decree was awaited by market
Indonesia had actually planned to introduce higher biodiesel mix on Jan. 1
Palm oil standard agreement rose 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) Energy and Mineral Resources Minister signed a decree on Friday allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while providing 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 prepared to introduce the necessary requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial guideline 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 official, said biodiesel manufacturers and fuel sellers will be offered till Feb. 28 to adjust to the B40 mix. She stated 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 led to a 2.6% drop in the Malaysian palm oil standard agreement on Thursday. On Friday, it recuperated by around 1%.
Fuel retailers and biodiesel manufacturers had said they were unable to prepare contracts for biodiesel distribution without the decree.
The biodiesel allocation for 2025 showed a boost from 2024's estimated biodiesel usage 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 mass transit, whose sales will be subsidised by the nation's palm oil fund.
"The remaining allocations will be cost market price. The non-PSO allotment is set at 8.07 million KL," Bahlil said, adding the fund might not subsidise the price space between the palm oil and fossil fuels for the total allocation.
BPDPKS, the company in charge of collecting and handling the palm oil funds, approximated in November B40 would require a 68% subsidy boost.
To assist fund that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the existing 7.5%, however for that to occur, another official regulation is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)