Biodiesel allowance decree was awaited by industry
Indonesia had actually prepared to release higher biodiesel mix on Jan. 1
Palm oil criteria contract increased 1% after previous fall
Government intends 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 designating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while offering the market till the end 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 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 told reporters, including the federal government was working to increase the necessary biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, said biodiesel manufacturers and fuel retailers will be given until Feb. 28 to adapt to the B40 mix. She said the hold-up was because of technical obstacles connected to aids for the fuel.
The non-implementation on Jan. 1. had led to a 2.6% drop in the Malaysian palm oil benchmark contract on Thursday. On Friday, it recovered by around 1%.
Fuel sellers and biodiesel manufacturers had said they were unable to prepare agreements for biodiesel circulation without the decree.
The biodiesel allotment for 2025 suggested a boost from 2024's approximated biodiesel consumption 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 responsibility (PSO), which covers sectors such as public transportation, whose sales will be by the country's palm oil fund.
"The remaining allotments will be sold at market rate. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, including the fund might not subsidise the price space between the palm oil and fossil fuels for the total allocation.
BPDPKS, the company in charge of collecting and handling the palm oil funds, estimated in November B40 would need a 68% subsidy boost.
To assist fund that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the current 7.5%, however for that to take place, another main policy is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati
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Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
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