Biodiesel allowance decree was waited for by industry

Indonesia had planned to release higher biodiesel mix on Jan. 1

Palm oil criteria agreement rose 1% after previous fall

Government intends 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while offering the market till the end of next month to adapt to the higher level of the fuel in the mix.

Indonesia, the world’s biggest exporter of palm oil, had actually planned to launch the compulsory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.

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

Eniya Listiani Dewi, a ministry senior official, said biodiesel manufacturers and fuel retailers will be given up until Feb. 28 to adjust to the B40 mix. She said the delay was due to the fact that of technical obstacles connected to aids for the fuel.

The non-implementation on Jan. 1. had actually led to a 2.6% drop in the Malaysian palm oil criteria agreement on Thursday. On Friday, it recuperated by around 1%.

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

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

Of the overall allotment for this year, 7.55 million KL is for the general public service commitment (PSO), which such as mass transit, whose sales will be subsidised by the country’s palm oil fund.

“The staying allotments will be cost market price. The non-PSO allocation is set at 8.07 million KL,” Bahlil said, adding the fund could not subsidise the price gap in between the palm oil and fossil fuels for the general allocation.

BPDPKS, the company in charge of gathering and managing the palm oil funds, approximated 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 present 7.5%, but for that to take place, another main guideline is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati