Biodiesel allocation decree was awaited by market
Indonesia had planned to release greater biodiesel mix on Jan. 1
Palm oil standard agreement rose 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while the market till completion of next month to adjust to the higher level of the fuel in the mix.
Indonesia, the world's largest exporter of palm oil, had planned to introduce the mandatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial policy has been signed," the minister Bahlil Lahadalia informed press reporters, adding the government was working to increase the obligatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel manufacturers and fuel merchants will be given till Feb. 28 to adjust to the B40 mix. She stated the hold-up was because of technical obstacles connected to subsidies for the fuel.
The non-implementation on Jan. 1. had led to a 2.6% drop in the Malaysian palm oil criteria agreement on Thursday. On Friday, it recuperated by around 1%.
Fuel merchants and biodiesel manufacturers had stated they were not able to prepare agreements for biodiesel distribution without the decree.
The biodiesel allocation for 2025 suggested a boost from 2024's estimated biodiesel usage of 12.98 KL, ministry data revealed on Friday.
Of the total allocation for this year, 7.55 million KL is for the public service responsibility (PSO), which covers sectors such as public transport, whose sales will be subsidised by the nation's palm oil fund.
"The remaining allowances will be cost market cost. The non-PSO allotment is set at 8.07 million KL," Bahlil said, including the fund might not subsidise the price space in between the palm oil and fossil fuels for the overall allotment.
BPDPKS, the agency in charge of gathering and handling the palm oil funds, approximated in November B40 would need a 68% aid boost.
To assist fund that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the current 7.5%, however for that to occur, another official regulation is required. (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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