Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Biodiesel allowance decree was awaited by market
Indonesia had prepared to introduce higher biodiesel mix on Jan. 1
Palm oil criteria contract increased 1% after previous fall
Government aims 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 distribution, while offering the market up 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 planned to release the mandatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial guideline has been signed," the minister Bahlil Lahadalia told press reporters, including the federal 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 provided till Feb. 28 to adjust to the B40 mix. She said the hold-up was since of technical difficulties connected to aids for the fuel.
The non-implementation on Jan. 1. had actually resulted in a 2.6% drop in the oil standard contract on Thursday. On Friday, it recuperated by around 1%.
Fuel merchants and biodiesel manufacturers had said they were not able to prepare agreements for biodiesel distribution without the decree.
The biodiesel allotment for 2025 showed an increase from 2024's estimated biodiesel intake of 12.98 KL, ministry information showed on Friday.
Of the total allowance 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 allocations will be cost market rate. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, including the fund could not subsidise the price gap between the palm oil and nonrenewable fuel sources for the total allowance.
BPDPKS, the firm in charge of gathering and handling the palm oil funds, approximated in November B40 would need a 68% subsidy boost.
To assist finance that, Indonesia plans to increase its export levy for unrefined palm oil (CPO) to 10% from the existing 7.5%, but for that to occur, another official policy is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)