Biodiesel allocation decree was awaited by industry
Indonesia had planned to introduce greater biodiesel mix on Jan. 1
Palm oil criteria 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) - Indonesia Energy and Mineral Resources Minister signed a decree on Friday allocating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, 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 largest exporter of palm oil, had planned to introduce the necessary requirement of 40% palm oil fuel in on Jan. 1, up from 35% now.
"The ministerial guideline has been signed," the minister Bahlil Lahadalia informed reporters, including the government was working to increase the compulsory 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 said the hold-up was since of technical obstacles linked to subsidies for the fuel.
The non-implementation on Jan. 1. had actually caused a 2.6% drop in the Malaysian palm oil benchmark contract on Thursday. On Friday, it recuperated by around 1%.
Fuel sellers and biodiesel manufacturers had actually said they were not able to draw up contracts for biodiesel circulation without the decree.
The biodiesel allotment for 2025 suggested a boost from 2024's approximated biodiesel consumption of 12.98 KL, ministry data revealed on Friday.
Of the overall allowance for this year, 7.55 million KL is for the general public service commitment (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country's palm oil fund.
"The staying allowances will be offered at market rate. The non-PSO allowance is set at 8.07 million KL," Bahlil stated, including the fund might not subsidise the cost space between the palm oil and fossil fuels for the general allocation.
BPDPKS, the company in charge of gathering and handling the palm oil funds, approximated in November B40 would need a 68% subsidy increase.
To help finance that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, however for that to take place, another official guideline 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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