Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allotment decree was waited for by industry

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

Palm oil standard agreement increased 1% after previous fall

Government goes 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 distribution, while giving the industry till the end of next month to adapt to the higher level of the fuel in the mix.

Indonesia, the world’s biggest exporter of palm oil, had actually prepared to launch the compulsory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.

“The ministerial regulation has been signed,” the minister Bahlil Lahadalia informed reporters, including the government was working to increase the mandatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, said biodiesel manufacturers and fuel retailers will be provided until Feb. 28 to adapt to the B40 mix. She stated the hold-up was since of technical obstacles connected to subsidies for the fuel.

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

Fuel sellers and biodiesel manufacturers had stated they were not able to prepare contracts for biodiesel circulation without the decree.

The biodiesel allotment for 2025 suggested a boost from 2024‘s approximated biodiesel consumption of 12.98 KL, ministry information showed on Friday.

Of the total allocation 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 .

“The staying allotments will be cost market value. The non-PSO allotment is set at 8.07 million KL,” Bahlil said, including the fund could not subsidise the price space in between the palm oil and nonrenewable fuel sources for the total allowance.

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

To help finance that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the existing 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)