Biodiesel allowance decree was awaited by market
Indonesia had prepared to introduce greater biodiesel mix on Jan. 1
Palm oil benchmark 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while providing the industry until the end of next month to adjust to the greater level of the fuel in the mix.
Indonesia, the world's biggest exporter of palm oil, had actually prepared to introduce 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 informed press reporters, adding the government was working to increase the obligatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, said biodiesel producers and fuel retailers will be offered till Feb. 28 to adapt to the B40 mix. She stated the delay was because of technical obstacles connected to aids for the fuel.
The non-implementation on Jan. 1. had led to a 2.6% drop in the Malaysian palm oil standard agreement on Thursday. On Friday, it recovered by around 1%.
Fuel retailers and biodiesel manufacturers had said they were not able to prepare contracts for biodiesel distribution without the decree.
The biodiesel allotment for 2025 suggested an increase from 2024's estimated biodiesel intake of 12.98 KL, ministry data revealed 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 mass transit, whose sales will be subsidised by the oil fund.
"The staying allowances will be cost market value. The non-PSO allotment 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 overall allowance.
BPDPKS, the company in charge of collecting and handling the palm oil funds, approximated in November B40 would need a 68% aid boost.
To assist finance that, Indonesia plans to increase its export levy for unrefined palm oil (CPO) to 10% from the present 7.5%, but for that to occur, 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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