Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allowance decree was waited for by industry

Indonesia had planned to launch greater biodiesel mix on Jan. 1

Palm oil standard contract rose 1% after previous fall

Government goes 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 designating 15.6 million kilolitres (KL) of for 2025 circulation, while giving the industry 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 actually 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 necessary biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, stated biodiesel manufacturers and fuel merchants will be given till Feb. 28 to adapt to the B40 mix. She said 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 benchmark contract on Thursday. On Friday, it recovered by around 1%.

Fuel merchants and biodiesel manufacturers had actually said they were not able to draw up contracts for biodiesel distribution without the decree.

The biodiesel allowance for 2025 indicated a boost from 2024’s approximated biodiesel intake of 12.98 KL, ministry information revealed on Friday.

Of the total allocation for this year, 7.55 million KL is for the general public service obligation (PSO), which covers sectors such as public transportation, whose sales will be subsidised by the nation’s palm oil fund.

“The remaining allotments will be sold at market value. The non-PSO allowance is set at 8.07 million KL,” Bahlil stated, including the fund could not subsidise the cost gap in between the palm oil and fossil fuels for the overall allocation.

BPDPKS, the company in charge of gathering and handling the palm oil funds, estimated in November B40 would need a 68% aid boost.

To help fund that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the existing 7.5%, but for that to occur, another official regulation is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)