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1 Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was awaited by market

Indonesia had actually planned to introduce greater biodiesel mix on Jan. 1

Palm oil standard 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while giving the industry till the end of next month to adjust to the higher level of the fuel in the mix.

Indonesia, the world's largest exporter of palm oil, had actually prepared to launch the mandatory 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 told reporters, adding the federal government was working to increase the compulsory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, stated biodiesel producers and fuel sellers will be given until Feb. 28 to adapt to the B40 mix. She said the delay was since of technical obstacles connected to subsidies for the fuel.

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

Fuel sellers and biodiesel manufacturers had actually said they were unable to draw up contracts for biodiesel circulation without the decree.

The biodiesel allotment for 2025 showed an increase from 2024's approximated biodiesel consumption 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 (PSO), which covers sectors such as mass transit, whose sales will be subsidised by the nation's palm oil fund.

"The remaining allotments will be cost market value. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, including the fund could not subsidise the cost gap between the palm oil and fossil fuels for the general allocation.

BPDPKS, the agency in charge of gathering and managing 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%, but for that to happen, another main guideline is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati