Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was waited for by market

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

Palm oil criteria agreement rose 1% after previous fall

Government goes 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 distribution, while giving the market till completion of next month to adapt to the greater level of the fuel in the mix.

Indonesia, the world’s largest exporter of palm oil, had actually planned to introduce 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 informed press reporters, including the government was working to increase the necessary biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior authorities, said biodiesel producers and fuel merchants will be given up until Feb. 28 to adjust to the B40 mix. She said the hold-up was due to the fact that of linked to aids for the fuel.

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

Fuel merchants and biodiesel manufacturers had said they were not able to draw up contracts for biodiesel circulation without the decree.

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

Of the total allotment 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 subsidised by the nation’s palm oil fund.

“The remaining allowances will be cost market cost. 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 fossil fuels for the overall allowance.

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

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