Biodiesel allotment decree was awaited by industry
Indonesia had actually planned to launch 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 assigning 15.6 million kilolitres (KL) of
biodiesel for 2025 circulation, while providing the
industry till the end of next month to adjust to the higher level of the fuel in the mix.
Indonesia, the world's largest exporter 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 guideline has been signed," the minister Bahlil
Lahadalia informed reporters, adding the government was working to increase the
compulsory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, stated biodiesel manufacturers and fuel retailers will be provided up until Feb. 28 to adapt to the B40 mix. She stated the delay was due to the fact that of technical obstacles linked to subsidies for the fuel.
The
non-implementation on Jan. 1. had resulted in a 2.6% drop in the Malaysian palm oil standard
contract on Thursday. On Friday, it
recovered by around 1%.
Fuel sellers and biodiesel manufacturers had actually said they were not able to prepare contracts for
biodiesel distribution without the decree.
The
biodiesel allotment for 2025 showed a boost from 2024's approximated biodiesel intake of 12.98 KL,
ministry data
revealed on Friday.
Of the total allowance 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
country's palm oil fund.
"The staying allotments will be cost market cost. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, including the fund might not
subsidise the cost space in between the palm oil and
nonrenewable fuel sources for the overall allowance.
BPDPKS, the company in charge of gathering and managing the
palm oil funds, approximated in November B40 would
require a 68%
subsidy increase.
To assist fund that, Indonesia plans 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 required. (Reporting by
Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; modifying by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)
