Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was awaited by market

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

Palm oil criteria contract 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while giving the market until the end of next month to adapt to the higher level of the fuel in the mix.

Indonesia, the world’s largest exporter of palm oil, had actually planned to launch the compulsory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.

“The ministerial regulation has actually been signed,” the minister Bahlil Lahadalia told press reporters, including the federal government was working to increase the compulsory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior authorities, said biodiesel producers and fuel sellers will be given up until Feb. 28 to adjust to the B40 mix. She said the delay was since of technical challenges connected to aids for the fuel.

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

Fuel sellers and biodiesel had actually stated they were not able to prepare contracts for biodiesel circulation without the decree.

The biodiesel allowance for 2025 indicated an increase from 2024’s approximated biodiesel consumption of 12.98 KL, ministry information revealed on Friday.

Of the total allotment for this year, 7.55 million KL is for the general public service obligation (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country’s palm oil fund.

“The remaining allotments will be cost market cost. The non-PSO allowance is set at 8.07 million KL,” Bahlil stated, adding the fund could not subsidise the price gap between the palm oil and nonrenewable fuel sources for the general allotment.

BPDPKS, the agency in charge of gathering and managing the palm oil funds, approximated in November B40 would require a 68% subsidy increase.

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