Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was awaited by industry


Indonesia had planned to release higher 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 remark)


By Bernadette Christina and Fransiska Nangoy


JAKARTA, Jan 3 (Reuters) - Indonesia Energy and Mineral Resources a decree on Friday designating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while providing the industry till completion of next month to adjust to the higher level of the fuel in the mix.


Indonesia, the world's largest 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 been signed," the minister Bahlil Lahadalia told 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 sellers will be offered up until Feb. 28 to adjust to the B40 mix. She stated the hold-up was because of technical challenges linked to subsidies for the fuel.


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


Fuel sellers and biodiesel manufacturers had said they were not able to draw up agreements for biodiesel distribution without the decree.


The biodiesel allotment for 2025 showed a boost from 2024's estimated biodiesel consumption of 12.98 KL, ministry information revealed on Friday.


Of the overall allowance for this year, 7.55 million KL is for the public service responsibility (PSO), which covers sectors such as mass transit, whose sales will be subsidised by the nation's palm oil fund.


"The remaining allotments will be cost market rate. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, including the fund might not subsidise the cost space in between the palm oil and nonrenewable fuel sources for the general allocation.


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


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