Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allotment decree was awaited by industry

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

Palm oil standard agreement 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while providing the market until the end of next month to adjust to the higher level of the fuel in the mix.

Indonesia, the world’s largest exporter of palm oil, had planned to introduce the mandatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.

“The ministerial guideline has actually been signed,” the minister Bahlil Lahadalia informed reporters, including the government was working to increase the obligatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior authorities, said biodiesel producers and fuel merchants will be provided until Feb. 28 to adjust to the B40 mix. She stated the delay was since of technical obstacles to aids 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 said they were not able to draw up contracts for biodiesel circulation without the decree.

The biodiesel allowance for 2025 suggested an increase from 2024’s approximated 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 obligation (PSO), which covers sectors such as mass transit, whose sales will be subsidised by the country’s palm oil fund.

“The remaining allocations will be sold at market value. The non-PSO allotment is set at 8.07 million KL,” Bahlil said, adding the fund might not subsidise the price space in between the palm oil and nonrenewable fuel sources for the general allowance.

BPDPKS, the company in charge of collecting and managing the palm oil funds, estimated in November B40 would require a 68% aid boost.

To assist finance that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the current 7.5%, however for that to take place, another main regulation is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)