Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allotment decree was waited for by industry

Indonesia had actually planned to introduce greater biodiesel mix on Jan. 1

Palm oil standard contract rose 1% after previous fall

Government aims 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while giving the market up until the end of next month to adapt to the higher level of the fuel in the mix.

Indonesia, the world’s largest exporter of palm oil, had actually planned to launch the obligatory 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 informed reporters, adding the government was working to increase the necessary biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior authorities, said biodiesel producers and fuel merchants will be offered up until Feb. 28 to adjust to the B40 mix. She stated the delay was because of technical challenges connected to aids for the fuel.

The on Jan. 1. had caused a 2.6% drop in the Malaysian palm oil benchmark contract on Thursday. On Friday, it recuperated by around 1%.

Fuel sellers and biodiesel manufacturers had said they were not able to draw up agreements for biodiesel circulation without the decree.

The biodiesel allowance for 2025 showed an increase from 2024’s approximated biodiesel usage of 12.98 KL, ministry data 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 transport, whose sales will be subsidised by the country’s palm oil fund.

„The staying allocations will be cost market value. The non-PSO allocation is set at 8.07 million KL,” Bahlil said, adding the fund might not subsidise the cost space between the palm oil and fossil fuels for the overall allocation.

BPDPKS, the company in charge of collecting and handling the palm oil funds, approximated in November B40 would need a 68% subsidy boost.

To help finance that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the current 7.5%, however for that to happen, another official guideline is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)