Biodiesel allocation decree was awaited by market
Indonesia had prepared to introduce greater biodiesel mix on Jan. 1
Palm oil standard contract 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) 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 up until the end 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 introduce 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 reporters, adding the federal government was working to increase the obligatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, said biodiesel producers and fuel sellers will be offered up until Feb. 28 to adjust to the B40 mix. She stated the hold-up was due to the fact that of technical difficulties connected to subsidies for the fuel.
The non-implementation on Jan. 1. had resulted in a 2.6% drop in the Malaysian palm oil criteria contract on Thursday. On Friday, it recuperated by around 1%.
Fuel retailers and biodiesel manufacturers had actually stated they were unable to prepare agreements for biodiesel circulation without the decree.
The biodiesel allotment for 2025 suggested a boost from 2024's approximated biodiesel intake of 12.98 KL, ministry information revealed on Friday.
Of the total allotment for this year, 7.55 million KL is for the public service commitment (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country's palm oil fund.
"The remaining allowances will be sold at market price. The non-PSO allocation is set at 8.07 million KL," Bahlil said, including the fund could not subsidise the rate space between the palm oil and fossil fuels for the general allotment.
BPDPKS, the agency in charge of gathering and managing the palm oil funds, approximated in November B40 would need a 68% aid boost.
To assist finance that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the existing 7.5%, but for that to take place, another official policy is required. (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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