Biodiesel allocation decree was waited for by market
Indonesia had prepared to introduce greater biodiesel mix on Jan. 1
Palm oil rose 1% after previous fall
Government intends 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 biodiesel for 2025 distribution, while providing the industry up 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 release the compulsory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial policy has actually been signed," the minister Bahlil Lahadalia informed press reporters, adding the government was working to increase the necessary biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel producers and fuel sellers will be offered 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 caused 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 stated they were not able to draw up contracts for biodiesel distribution without the decree.
The biodiesel allotment for 2025 indicated an increase from 2024's approximated biodiesel consumption of 12.98 KL, ministry information showed on Friday.
Of the overall 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 country's palm oil fund.
"The staying allocations will be sold at market price. The non-PSO allotment is set at 8.07 million KL," Bahlil stated, adding the fund might not subsidise the price 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 need a 68% subsidy boost.
To help fund that, Indonesia plans to increase its export levy for unrefined palm oil (CPO) to 10% from the current 7.5%, but for that to take place, another main regulation is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati
1
Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Olen Oconnor edited this page 6 months ago