Biodiesel allocation decree was awaited by industry
Indonesia had actually prepared to release higher biodiesel mix on Jan. 1
Palm oil standard contract rose 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 circulation, while offering the market 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 actually planned to introduce the obligatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial guideline has actually been signed," the minister Bahlil Lahadalia told press reporters, adding the government was working to increase the necessary biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, stated biodiesel manufacturers and fuel merchants will be given up until Feb. 28 to adapt to the B40 mix. She stated the delay was because of technical challenges connected to aids 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 recovered by around 1%.
Fuel merchants and biodiesel producers had stated they were unable to draw up contracts for biodiesel circulation without the decree.
The biodiesel allotment for 2025 suggested an increase from 2024's estimated biodiesel consumption of 12.98 KL, ministry information revealed on Friday.
Of the total allowance for this year, 7.55 million KL is for the general public service responsibility (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country's palm oil fund.
"The remaining allocations will be cost market price. The non-PSO allowance is set at 8.07 million KL," Bahlil said, adding the fund could not subsidise the cost space 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, estimated in November B40 would need a 68% subsidy boost.
To help finance that, Indonesia prepares to increase its export levy for oil (CPO) to 10% from the current 7.5%, however for that to happen, another main policy 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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