Biodiesel allowance decree was waited for by market
Indonesia had actually prepared to introduce higher biodiesel mix on Jan. 1
Palm oil standard agreement increased 1% after previous fall
Government goes 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 designating 15.6 million kilolitres (KL) of for 2025 distribution, while providing the market up until completion of next month to adapt 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 regulation has actually been signed," the minister Bahlil Lahadalia told press reporters, including the federal government was working to increase the mandatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, said biodiesel manufacturers and fuel merchants will be provided till Feb. 28 to adjust to the B40 mix. She stated the hold-up was due to the fact that 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 benchmark contract on Thursday. On Friday, it recuperated by around 1%.
Fuel retailers and biodiesel manufacturers had actually said they were unable to prepare contracts for biodiesel distribution without the decree.
The biodiesel allotment for 2025 indicated a boost from 2024's estimated biodiesel usage of 12.98 KL, ministry data showed on Friday.
Of the overall allotment for this year, 7.55 million KL is for the general public service responsibility (PSO), which covers sectors such as mass transit, whose sales will be subsidised by the country's palm oil fund.
"The staying allotments will be sold at market rate. The non-PSO allotment is set at 8.07 million KL," Bahlil stated, including the fund might not subsidise the price gap in between the palm oil and nonrenewable fuel sources for the general allotment.
BPDPKS, the agency in charge of collecting and managing the palm oil funds, approximated in November B40 would need a 68% aid increase.
To assist finance that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the existing 7.5%, but for that to happen, another main regulation 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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