Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Biodiesel allocation decree was awaited by market
Indonesia had actually prepared to release greater biodiesel mix on Jan. 1
Palm oil standard agreement rose 1% after previous fall
Government aims 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 Minister signed a decree on Friday designating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while offering the market until 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 introduce the necessary 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, including the government was working to increase the compulsory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, said biodiesel producers and fuel merchants will be given up until Feb. 28 to adapt to the B40 mix. She said the hold-up was due to the fact that of technical obstacles connected to aids for the fuel.
The non-implementation on Jan. 1. had actually resulted in a 2.6% drop in the Malaysian palm oil criteria agreement on Thursday. On Friday, it recovered by around 1%.
Fuel merchants and biodiesel producers had stated they were not able to draw up contracts for biodiesel circulation without the decree.
The biodiesel allocation for 2025 suggested an increase from 2024's estimated biodiesel consumption of 12.98 KL, ministry information showed on Friday.
Of the overall allotment for this year, 7.55 million KL is for the public service commitment (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 cost. The non-PSO allotment is set at 8.07 million KL," Bahlil said, adding the fund could not subsidise the price space between the palm oil and fossil fuels for the general allotment.
BPDPKS, the agency in charge of collecting and handling the palm oil funds, approximated in November B40 would require a 68% aid increase.
To assist fund that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the existing 7.5%, however for that to happen, another official policy is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)