Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allotment decree was waited for by market

Indonesia had actually planned to launch 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 signed a decree on Friday allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while offering the market till 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 planned to launch the mandatory 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 reporters, adding the government was working to increase the obligatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel manufacturers and fuel merchants will be given up until Feb. 28 to adapt to the B40 mix. She said the delay was due to the fact that of technical challenges linked to subsidies for the fuel.

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

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

The biodiesel allotment for 2025 indicated a boost from 2024’s approximated biodiesel intake of 12.98 KL, ministry data showed on Friday.

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

„The remaining allotments will be cost market rate. The non-PSO allowance is set at 8.07 million KL,“ Bahlil said, including the fund might not subsidise the price gap between the palm oil and fossil fuels for the overall allowance.

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

To assist finance that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the present 7.5%, but for that to take place, 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)