Biodiesel allotment decree was waited for by industry
Indonesia had actually planned to release higher biodiesel mix on Jan. 1
Palm oil standard contract rose 1% after previous fall
Government intends 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while giving the market up until the end 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 launch the mandatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial policy has actually been signed," the minister Bahlil Lahadalia told reporters, including the federal government was working to increase the compulsory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel manufacturers and will be offered up until Feb. 28 to adapt to the B40 mix. She said the delay was due to the fact that of technical challenges connected to aids for the fuel.
The non-implementation on Jan. 1. had led to a 2.6% drop in the Malaysian palm oil criteria contract on Thursday. On Friday, it recovered by around 1%.
Fuel retailers and biodiesel producers had actually said they were unable to draw up agreements for biodiesel distribution without the decree.
The biodiesel allowance for 2025 indicated a boost from 2024's estimated biodiesel usage of 12.98 KL, ministry data showed on Friday.
Of the total allowance for this year, 7.55 million KL is for the public service obligation (PSO), which covers sectors such as mass transit, whose sales will be subsidised by the nation's palm oil fund.
"The staying allotments will be cost market value. The non-PSO allotment is set at 8.07 million KL," Bahlil said, adding the fund might not subsidise the price gap between the palm oil and nonrenewable fuel sources for the total allocation.
BPDPKS, the agency in charge of collecting and handling the palm oil funds, approximated in November B40 would need a 68% subsidy boost.
To help fund that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, but for that to occur, 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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