Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allowance decree was waited for by industry

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

Palm oil standard agreement rose 1% after previous fall

Government aims for 50% biodiesel mix in 2026

(Recasts with 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 distribution, while giving the industry 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 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 told reporters, including 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 merchants will be given up until Feb. 28 to adjust to the B40 mix. She stated the hold-up was because of technical difficulties connected to aids for the fuel.

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

Fuel merchants and biodiesel manufacturers had stated they were not able to draw up contracts for biodiesel distribution without the decree.

The biodiesel allowance for 2025 showed an increase from 2024’s approximated biodiesel intake of 12.98 KL, ministry information revealed on Friday.

Of the overall allocation for this year, 7.55 million KL is for the general public service responsibility (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 rate. The non-PSO allocation is set at 8.07 million KL,” Bahlil said, adding the fund might not subsidise the price space in between the palm oil and fossil fuels for the general allotment.

BPDPKS, the company in charge of collecting and handling the palm oil funds, approximated in November B40 would need a 68% subsidy boost.

To assist finance that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the current 7.5%, but for that to take place, another main policy is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)