Biodiesel allowance decree was awaited by market
Indonesia had actually planned to introduce greater biodiesel mix on Jan. 1
Palm oil standard agreement increased 1% after previous fall
Government aims for 50% biodiesel mix in 2026
( 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 market till 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 prepared to release the obligatory 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 informed reporters, adding the government was working to increase the mandatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, said biodiesel producers and fuel merchants will be provided until Feb. 28 to adapt to the B40 mix. She said the delay was due to the fact that of technical obstacles linked to aids for the fuel.
The non-implementation on Jan. 1. had actually resulted in a 2.6% drop in the Malaysian palm oil criteria contract on Thursday. On Friday, it recuperated by around 1%.
Fuel merchants and biodiesel manufacturers had stated they were unable to prepare contracts for biodiesel circulation without the decree.
The biodiesel allotment for 2025 indicated a boost from 2024's approximated biodiesel intake of 12.98 KL, ministry information showed on Friday.
Of the total allotment for this year, 7.55 million KL is for the public service responsibility (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 sold at market price. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, including the fund might not subsidise the price gap in between the palm oil and fossil fuels for the total allocation.
BPDPKS, the company in charge of collecting and managing the palm oil funds, estimated in November B40 would require a 68% aid boost.
To assist fund that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the existing 7.5%, but for that to happen, another main regulation is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati
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Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
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