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1 Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allowance decree was waited for by industry

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

Palm oil criteria agreement increased 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while offering the market till the end of next month to adapt to the higher level of the fuel in the mix.

Indonesia, the world's largest of palm oil, had actually prepared to introduce the necessary requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.

"The ministerial guideline has actually been signed," the minister Bahlil Lahadalia told press reporters, adding the government was working to increase the compulsory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, said biodiesel manufacturers and fuel sellers will be offered until Feb. 28 to adjust to the B40 mix. She said the hold-up was since of technical challenges linked to subsidies for the fuel.

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

Fuel sellers and biodiesel producers had said they were not able to prepare contracts for biodiesel distribution without the decree.

The biodiesel allotment for 2025 suggested an increase from 2024's estimated biodiesel intake of 12.98 KL, ministry data revealed on Friday.

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

"The remaining allowances will be cost market cost. The non-PSO allotment is set at 8.07 million KL," Bahlil stated, adding the fund might not subsidise the cost space in between the palm oil and nonrenewable fuel sources for the total 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 help finance that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, but for that to occur, another main policy is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati