Biodiesel allotment decree was waited for by industry
Indonesia had planned to introduce higher biodiesel mix on Jan. 1
Palm oil benchmark agreement increased 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 industry till completion of next month to adapt to the greater level of the fuel in the mix.
Indonesia, the world's largest exporter of palm oil, had planned to launch the necessary 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 necessary biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel producers and fuel sellers will be provided up until Feb. 28 to adjust to the B40 mix. She said the delay was since of technical challenges connected to aids for the fuel.
The non-implementation on Jan. 1. had actually led to a 2.6% drop in the oil standard contract on Thursday. On Friday, it recovered by around 1%.
Fuel retailers and biodiesel manufacturers had stated they were not able to prepare contracts for biodiesel circulation without the decree.
The biodiesel allowance for 2025 showed an increase from 2024's approximated biodiesel usage 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 obligation (PSO), which covers sectors such as mass transit, whose sales will be subsidised by the country's palm oil fund.
"The remaining allotments will be cost market price. The non-PSO allowance is set at 8.07 million KL," Bahlil stated, adding the fund might not subsidise the price gap in between the palm oil and fossil fuels for the general allowance.
BPDPKS, the firm in charge of collecting and handling the palm oil funds, estimated in November B40 would need a 68% subsidy increase.
To assist fund that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the current 7.5%, however for that to happen, another official regulation is required. (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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