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1 Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allotment decree was waited for by market

Indonesia had actually prepared to launch 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 biodiesel for 2025 circulation, while providing the market till completion 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 prepared to release the obligatory 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 federal government was working to increase the obligatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, stated biodiesel producers and fuel retailers will be given until Feb. 28 to adjust to the B40 mix. She stated the delay was because of technical challenges connected to subsidies for the fuel.

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

Fuel merchants and biodiesel manufacturers had stated they were not able to draw up agreements for biodiesel distribution without the decree.

The biodiesel allocation for 2025 showed an increase from 2024's estimated biodiesel consumption of 12.98 KL, ministry information revealed on Friday.

Of the overall allocation for this year, 7.55 million KL is for the general public service obligation (PSO), which covers sectors such as public transportation, whose sales will be subsidised by the nation's palm oil fund.

"The staying allocations will be offered at market price. The non-PSO allotment is set at 8.07 million KL," Bahlil said, including the fund could not subsidise the cost gap between the palm oil and fossil fuels for the overall allotment.

BPDPKS, the agency in charge of gathering and handling the palm oil funds, estimated in November B40 would require a 68% aid increase.

To assist finance that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the current 7.5%, however for that to occur, another main regulation is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati