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Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allowance decree was waited for by industry

Indonesia had prepared to release higher biodiesel mix on Jan. 1

Palm oil benchmark contract increased 1% after previous fall

Government intends 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while offering the industry till completion of next month to adjust to the greater level of the fuel in the mix.

Indonesia, the world’s largest of palm oil, had prepared to launch the necessary 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 told press reporters, including the federal government was working to increase the obligatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, said biodiesel manufacturers and fuel retailers will be given up until Feb. 28 to adjust to the B40 mix. She said the hold-up was due to the fact that of technical obstacles connected to subsidies for the fuel.

The non-implementation on Jan. 1. had caused a 2.6% drop in the Malaysian palm oil benchmark contract on Thursday. On Friday, it recovered by around 1%.

Fuel retailers and biodiesel producers had actually stated they were unable to prepare agreements for biodiesel distribution without the decree.

The biodiesel allocation for 2025 indicated a boost from 2024’s estimated biodiesel usage of 12.98 KL, ministry information revealed on Friday.

Of the total allotment for this year, 7.55 million KL is for the general public service obligation (PSO), which covers sectors such as public transport, whose sales will be subsidised by the nation’s palm oil fund.

“The staying allowances will be cost market value. The non-PSO allocation is set at 8.07 million KL,” Bahlil said, including the fund could not subsidise the rate space between the palm oil and nonrenewable fuel sources for the general allocation.

BPDPKS, the firm in charge of gathering and managing the palm oil funds, approximated in November B40 would need a 68% subsidy boost.

To assist fund that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the existing 7.5%, however for that to occur, another official regulation is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)