Biodiesel allocation decree was awaited by market
Indonesia had actually planned to launch greater biodiesel mix on Jan. 1
Palm oil criteria contract rose 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 Minister signed a decree on Friday assigning 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while giving the market up until the end of next month to adapt to the greater level of the fuel in the mix.
Indonesia, the world's biggest exporter of palm oil, had actually planned to introduce the compulsory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial policy has actually been signed," the minister Bahlil Lahadalia reporters, adding the federal 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 retailers will be offered up until Feb. 28 to adapt to the B40 mix. She said the delay was because of technical challenges linked to aids for the fuel.
The non-implementation on Jan. 1. had actually led to a 2.6% drop in the Malaysian palm oil standard contract on Thursday. On Friday, it recovered by around 1%.
Fuel merchants and biodiesel manufacturers had said they were unable to prepare agreements for biodiesel distribution without the decree.
The biodiesel allowance for 2025 showed a boost from 2024's approximated biodiesel consumption of 12.98 KL, ministry data showed on Friday.
Of the overall allowance for this year, 7.55 million KL is for the public service obligation (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country's palm oil fund.
"The remaining allowances will be offered at market value. The non-PSO allotment is set at 8.07 million KL," Bahlil said, including the fund might not subsidise the price gap in between the palm oil and nonrenewable fuel sources for the general allowance.
BPDPKS, the company in charge of collecting and handling the palm oil funds, approximated in November B40 would require a 68% aid increase.
To help finance that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, however for that to happen, another official regulation is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati
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Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
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