Biodiesel allotment decree was awaited by industry
Indonesia had planned to release higher biodiesel mix on Jan. 1
Palm oil benchmark agreement rose 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while giving the industry up until 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 planned to release the compulsory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial guideline has been signed," the minister Bahlil Lahadalia told reporters, adding the government was working to increase the compulsory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, said biodiesel producers and fuel retailers will be provided till Feb. 28 to adjust to the B40 mix. She stated the hold-up was because of technical obstacles linked to subsidies for the fuel.
The non-implementation on Jan. 1. had actually led to a 2.6% drop in the Malaysian palm oil standard contract on Thursday. On Friday, it recuperated by around 1%.
Fuel retailers and biodiesel producers had said they were unable to draw up agreements for biodiesel circulation without the decree.
The biodiesel allotment for 2025 suggested an increase from 2024's estimated biodiesel usage of 12.98 KL, ministry information revealed on Friday.
Of the total allocation for this year, 7.55 million KL is for the general public service commitment (PSO), which covers sectors such as mass transit, whose sales will be by the country's palm oil fund.
"The remaining allowances will be offered at market value. The non-PSO allocation is set at 8.07 million KL," Bahlil said, adding the fund might not subsidise the rate gap in between the palm oil and fossil fuels for the overall allocation.
BPDPKS, the company in charge of collecting and managing the palm oil funds, estimated in November B40 would require a 68% subsidy increase.
To assist fund that, Indonesia plans to increase its export levy for unrefined palm oil (CPO) to 10% from the present 7.5%, however for that to occur, another main regulation 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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