Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allowance decree was waited for by industry

Indonesia had prepared to launch greater 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 signed a decree on Friday allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while giving the industry until the end of next month to adapt 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 obligatory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.

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

Eniya Listiani Dewi, a ministry senior authorities, said biodiesel manufacturers and fuel merchants will be offered until Feb. 28 to adjust to the B40 mix. She stated the hold-up was since of technical difficulties connected to subsidies for the fuel.

The non-implementation on Jan. 1. had resulted in a 2.6% drop in the Malaysian palm oil standard agreement on Thursday. On Friday, it recuperated 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 allowance for 2025 showed an increase from 2024’s approximated biodiesel intake of 12.98 KL, ministry data revealed on Friday.

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

“The staying allocations will be cost market value. The non-PSO allocation is set at 8.07 million KL,” Bahlil stated, including the fund might not subsidise the price gap in between the palm oil and fossil fuels for the total allotment.

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

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