Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was awaited by market

Indonesia had planned to launch higher biodiesel mix on Jan. 1

Palm oil benchmark contract increased 1% after previous fall

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 circulation, while offering the industry until completion of next month to adjust to the higher level of the fuel in the mix.

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

« The ministerial regulation has been signed, » the minister Bahlil Lahadalia told reporters, including the government was working to increase the obligatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel producers and fuel merchants will be provided up 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 resulted in a 2.6% drop in the Malaysian palm oil standard 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 agreements for biodiesel distribution without the decree.

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

Of the overall allotment for this year, 7.55 million KL is for the public service responsibility (PSO), which covers sectors such as public transportation, 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, adding the fund might not subsidise the cost gap between the palm oil and fossil fuels for the general allotment.

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

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