Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was awaited by industry

Indonesia had prepared to release greater biodiesel mix on Jan. 1

Palm oil criteria 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 giving the industry till completion of next month to adapt to the greater level of the fuel in the mix.

Indonesia, the world’s biggest exporter of palm oil, had actually planned to introduce 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 told reporters, including the federal government was working to increase the necessary biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel manufacturers and fuel merchants will be offered up until Feb. 28 to adjust to the B40 mix. She said the delay was because of technical challenges linked to aids for the fuel.

The non-implementation on Jan. 1. had caused a 2.6% drop in the Malaysian palm oil standard agreement on Thursday. On Friday, it recovered by around 1%.

Fuel sellers and biodiesel producers had actually stated they were unable to draw up contracts for biodiesel circulation without the decree.

The biodiesel allocation for 2025 indicated an increase from 2024’s estimated biodiesel intake of 12.98 KL, ministry data showed 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 country’s palm oil fund.

“The staying allocations will be cost market value. The non-PSO allocation is set at 8.07 million KL,” Bahlil said, adding the fund could not subsidise the rate gap in between the palm oil and fossil fuels for the general allowance.

BPDPKS, the company in charge of collecting and managing the palm oil funds, approximated in November B40 would require a 68% aid increase.

To help finance that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the current 7.5%, however for that to occur, another main regulation is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)