Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Biodiesel allowance decree was waited for by industry
Indonesia had planned to release higher biodiesel mix on Jan. 1
Palm oil benchmark agreement increased 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while providing the industry up until completion 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 launch the necessary 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, including the government was working to increase the necessary biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, said biodiesel producers and fuel sellers will be given up until Feb. 28 to adjust to the B40 mix. She said the delay was since of technical obstacles connected to subsidies for the fuel.
The non-implementation on Jan. 1. had led to a 2.6% drop in the Malaysian palm oil criteria agreement on Thursday. On Friday, it recovered by around 1%.
Fuel sellers and biodiesel producers had stated they were not able to draw up contracts for biodiesel distribution without the decree.
The biodiesel allowance for 2025 suggested a boost from 2024's estimated biodiesel intake 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 commitment (PSO), which such as public transport, whose sales will be subsidised by the country's palm oil fund.
"The staying allocations will be cost market cost. The non-PSO allowance is set at 8.07 million KL," Bahlil stated, adding the fund might not subsidise the price space in between the palm oil and nonrenewable fuel sources for the general allocation.
BPDPKS, the firm in charge of collecting and managing the palm oil funds, estimated in November B40 would need a 68% subsidy increase.
To help finance that, Indonesia plans 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 required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)
