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1 Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allotment decree was waited for by market

Indonesia had actually prepared to release greater biodiesel mix on Jan. 1

Palm oil benchmark contract rose 1% after previous fall

Government goes for 50% biodiesel mix in 2026

(Recasts with energy minister's comment)

By Bernadette Christina and 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 providing the industry up until completion of next month to adjust to the higher level of the fuel in the mix.

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

"The ministerial guideline has actually been signed," the minister Bahlil Lahadalia told press reporters, including the federal government was working to increase the necessary biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, said biodiesel manufacturers and fuel merchants will be offered until Feb. 28 to adjust to the B40 mix. She said the delay was since of technical difficulties 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 benchmark contract on Thursday. On Friday, it recovered by around 1%.

Fuel merchants and biodiesel manufacturers had actually said they were unable to draw up agreements for biodiesel distribution without the decree.

The biodiesel allotment for 2025 indicated a boost from 2024's estimated biodiesel usage of 12.98 KL, ministry information revealed on Friday.

Of the overall allocation for this year, 7.55 million KL is for the public service obligation (PSO), which covers sectors such as mass transit, whose sales will be subsidised by the nation's palm oil fund.

"The staying allocations will be offered at market price. The non-PSO allowance is set at 8.07 million KL," Bahlil said, including the fund could not subsidise the cost gap between the palm oil and nonrenewable fuel sources for the overall allotment.

BPDPKS, the agency in charge of collecting and managing the palm oil funds, approximated in November B40 would require a 68% aid boost.

To assist fund that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the current 7.5%, but for that to take place, another official guideline is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati