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Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allowance decree was awaited by industry

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

Palm oil criteria contract increased 1% after previous fall

Government goes 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 industry up until the end 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 prepared to introduce 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 told press reporters, adding the federal government was working to increase the mandatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, said biodiesel producers and fuel retailers will be offered till Feb. 28 to adjust to the B40 mix. She said the delay was since of technical difficulties 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 recovered by around 1%.

Fuel merchants and biodiesel manufacturers had actually stated they were not able to prepare contracts for biodiesel circulation without the decree.

The biodiesel allowance for 2025 suggested a boost from 2024’s estimated biodiesel intake of 12.98 KL, ministry data revealed on Friday.

Of the total allowance for this year, 7.55 million KL is for the general public service commitment (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country’s palm oil fund.

“The staying allocations will be offered at market value. The non-PSO allowance is set at 8.07 million KL,” Bahlil stated, adding the fund might not subsidise the rate space between the palm oil and nonrenewable fuel sources for the total .

BPDPKS, the company in charge of collecting and managing the palm oil funds, estimated in November B40 would need a 68% subsidy increase.

To assist finance that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the existing 7.5%, but for that to occur, another main policy is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)