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Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Biodiesel allocation decree was waited for by industry
Indonesia had actually planned to release higher biodiesel mix on Jan. 1
Palm oil criteria agreement rose 1% after previous fall
Government aims 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 distribution, while giving the market until completion of next month to adjust to the greater level of the fuel in the mix.
Indonesia, the world’s biggest exporter of palm oil, had actually prepared to introduce the mandatory 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 told reporters, including the federal government was working to increase the necessary biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, said biodiesel producers and fuel retailers will be provided up until Feb. 28 to adapt to the B40 mix. She said the delay was due to the fact that of technical challenges connected to aids for the fuel.
The 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 actually said they were unable to prepare contracts for biodiesel circulation without the decree.
The biodiesel allotment for 2025 indicated a boost from 2024’s approximated biodiesel consumption of 12.98 KL, ministry data 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 mass transit, whose sales will be subsidised by the country’s palm oil fund.
“The remaining allowances will be offered at market price. The non-PSO allotment is set at 8.07 million KL,” Bahlil said, adding the fund could not subsidise the cost gap between the palm oil and nonrenewable fuel sources for the overall allotment.
BPDPKS, the company in charge of gathering and managing the palm oil funds, approximated in November B40 would require a 68% subsidy increase.
To help 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 happen, another main policy is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)