Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was awaited by market

Indonesia had actually prepared to introduce greater biodiesel mix on Jan. 1

Palm oil standard agreement increased 1% after previous fall

Government goes 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 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 release the obligatory 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, including the federal government was working to increase the obligatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, said biodiesel producers and fuel merchants will be offered until Feb. 28 to adapt to the B40 mix. She stated the delay was since of technical difficulties linked to for the fuel.

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

Fuel merchants and biodiesel producers had actually stated they were not able to draw up agreements for biodiesel distribution without the decree.

The biodiesel allocation for 2025 suggested an increase from 2024’s estimated biodiesel consumption of 12.98 KL, ministry data showed on Friday.

Of the overall allowance for this year, 7.55 million KL is for the 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 allowances will be cost market value. The non-PSO allocation is set at 8.07 million KL,” Bahlil said, including the fund could not subsidise the cost space between the palm oil and nonrenewable fuel sources for the general allotment.

BPDPKS, the company in charge of gathering and handling the palm oil funds, estimated in November B40 would need a 68% aid increase.

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