Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Biodiesel allocation decree was awaited by market
Indonesia had actually prepared to launch higher 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 Fransiska Nangoy
JAKARTA, Jan 3 (Reuters) - Indonesia Energy and Mineral Resources Minister signed a decree on Friday designating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while offering the industry up until the end of next month to adjust to the higher level of the fuel in the mix.
Indonesia, the world's biggest of palm oil, had actually prepared to release the necessary 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 informed press reporters, including the federal government was working to increase the mandatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel manufacturers and fuel merchants will be offered up until Feb. 28 to adjust to the B40 mix. She said the hold-up was since of technical challenges linked to aids 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 retailers and biodiesel manufacturers had stated they were not able to prepare contracts for biodiesel circulation without the decree.
The biodiesel allowance for 2025 indicated an increase from 2024's approximated biodiesel usage of 12.98 KL, ministry information showed on Friday.
Of the total allocation 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 staying allowances will be cost market rate. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, adding the fund could not subsidise the price gap in between the palm oil and nonrenewable fuel sources for the total allocation.
BPDPKS, the firm in charge of collecting and managing the palm oil funds, approximated in November B40 would need a 68% aid boost.
To assist fund that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the current 7.5%, but for that to take place, another main regulation is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)