Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was waited for by market

Indonesia had planned to release greater biodiesel mix on Jan. 1

Palm oil criteria agreement 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 offering the industry up until completion 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 planned to release the compulsory 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, including the federal government was working to increase the compulsory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, stated biodiesel manufacturers and fuel retailers will be till Feb. 28 to adjust to the B40 mix. She said the hold-up was due to the fact that of technical challenges connected to subsidies for the fuel.

The non-implementation on Jan. 1. had 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 producers had said they were not able to draw up agreements for biodiesel distribution without the decree.

The biodiesel allocation for 2025 suggested an increase from 2024’s approximated biodiesel usage of 12.98 KL, ministry information revealed on Friday.

Of the overall allotment for this year, 7.55 million KL is for the general public service responsibility (PSO), which covers sectors such as public transportation, whose sales will be subsidised by the nation’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 could not subsidise the cost space in between the palm oil and nonrenewable fuel sources for the general allotment.

BPDPKS, the firm in charge of collecting and handling the palm oil funds, approximated in November B40 would require a 68% subsidy boost.

To help fund 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 official guideline is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)