Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was waited for by industry

Indonesia had prepared to introduce higher biodiesel mix on Jan. 1

Palm oil standard contract 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 circulation, while offering the industry 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 launch the necessary requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.

“The ministerial policy has been signed,” the minister Bahlil Lahadalia informed reporters, adding the federal government was working to increase the necessary biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, said biodiesel manufacturers and fuel retailers will be provided up until Feb. 28 to adjust to the B40 mix. She stated the hold-up was due to the fact that of technical difficulties linked to subsidies for the fuel.

The non-implementation on Jan. 1. had actually led to a 2.6% drop in the Malaysian palm oil benchmark agreement on Thursday. On Friday, it recovered by around 1%.

Fuel merchants and biodiesel manufacturers had said they were not able to prepare agreements for biodiesel circulation without the decree.

The biodiesel allowance for 2025 suggested a boost from 2024’s estimated biodiesel usage of 12.98 KL, ministry data showed on Friday.

Of the total allocation for this year, 7.55 million KL is for the general public service commitment (PSO), which covers sectors such as mass transit, whose sales will be subsidised by the country’s palm .

“The remaining allotments will be sold at market value. The non-PSO allowance is set at 8.07 million KL,” Bahlil stated, adding the fund might not subsidise the rate space between the palm oil and fossil fuels for the total allowance.

BPDPKS, the company in charge of gathering and managing the palm oil funds, approximated in November B40 would require a 68% aid increase.

To assist finance that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the existing 7.5%, however 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)