Biodiesel allocation decree was awaited by industry

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

Palm oil criteria agreement increased 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 for 2025 circulation, while providing the industry till completion of next month to adapt 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 mandatory 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, 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 said the delay was since of technical challenges linked to aids for the fuel.

The non-implementation on Jan. 1. had actually resulted in a 2.6% drop in the Malaysian palm oil standard agreement on Thursday. On Friday, it recovered by around 1%.

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

The biodiesel allowance for 2025 indicated an increase from 2024’s approximated biodiesel intake of 12.98 KL, ministry data revealed on Friday.

Of the total allotment for this year, 7.55 million KL is for the public service obligation (PSO), which covers sectors such as mass transit, whose sales will be subsidised by the nation’s palm oil fund.

“The staying allocations will be offered at market value. The non-PSO allotment is set at 8.07 million KL,” Bahlil said, adding the fund could not subsidise the rate gap between the palm oil and nonrenewable fuel sources for the overall allotment.

BPDPKS, the company in charge of gathering and handling the palm oil funds, approximated in November B40 would require a 68% subsidy increase.

To help fund that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the current 7.5%, but for that to happen, another main guideline is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati