Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Biodiesel allotment decree was waited for by industry
Indonesia had prepared to introduce greater biodiesel mix on Jan. 1
Palm oil standard agreement rose 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 designating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while giving the industry until the end 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 planned to release the mandatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial regulation has been signed," the minister Bahlil Lahadalia informed press reporters, including the federal government was working to increase the obligatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, stated biodiesel manufacturers and fuel merchants will be offered until Feb. 28 to adapt to the B40 mix. She stated the delay was since of technical obstacles connected to subsidies 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 sellers and biodiesel producers had stated they were unable to prepare contracts for biodiesel circulation without the decree.
The biodiesel allotment for 2025 suggested an increase from 2024's estimated biodiesel usage of 12.98 KL, ministry information on Friday.
Of the total allotment for this year, 7.55 million KL is for the public service obligation (PSO), which covers sectors such as public transport, whose sales will be subsidised by the nation's palm oil fund.
"The staying allotments will be offered at market cost. The non-PSO allotment is set at 8.07 million KL," Bahlil said, adding the fund could not subsidise the cost gap between the palm oil and fossil fuels for the total allotment.
BPDPKS, the firm in charge of collecting and managing the palm oil funds, estimated in November B40 would require a 68% subsidy increase.
To assist fund that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, however 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)