Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Biodiesel allocation decree was awaited by industry
Indonesia had actually prepared to introduce greater biodiesel mix on Jan. 1
Palm oil criteria 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while providing the market till completion 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 prepared to release the obligatory 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 government was working to increase the obligatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, stated biodiesel manufacturers and fuel merchants will be offered until Feb. 28 to adapt to the B40 mix. She said the delay was since of technical obstacles connected to subsidies for the fuel.
The non-implementation on Jan. 1. had actually resulted in a 2.6% drop in the Malaysian palm oil benchmark contract on Thursday. On Friday, it recovered by around 1%.
Fuel merchants and biodiesel manufacturers had said they were unable to draw up contracts for biodiesel circulation without the decree.
The biodiesel allotment for 2025 indicated an increase from 2024’s approximated biodiesel intake of 12.98 KL, ministry information revealed on Friday.
Of the total allocation for this year, 7.55 million KL is for the public service obligation (PSO), which covers sectors such as public transport, whose sales will be by the country’s palm oil fund.
“The remaining allotments will be cost market rate. The non-PSO allocation is set at 8.07 million KL,” Bahlil said, including the fund might not subsidise the cost space in between the palm oil and nonrenewable fuel sources for the total allocation.
BPDPKS, the company in charge of collecting 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 unrefined palm oil (CPO) to 10% from the present 7.5%, however for that to occur, another main policy is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)