Biodiesel allowance decree was waited for by market
Indonesia had prepared to release greater biodiesel mix on Jan. 1
Palm oil criteria agreement rose 1% after previous fall
Government intends for 50% biodiesel mix in 2026
(Recasts with energy minister's remark)
By Bernadette Christina and 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 circulation, while providing the market up until completion 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 planned to release the compulsory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial policy has actually been signed," the minister Bahlil Lahadalia told press 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 sellers will be given up until Feb. 28 to adjust to the B40 mix. She stated the hold-up was because of technical obstacles linked to subsidies for the fuel.
The non-implementation on Jan. 1. had actually 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 actually stated they were not able to draw up contracts for biodiesel circulation without the decree.
The biodiesel allocation for 2025 showed an increase from 2024's approximated biodiesel usage of 12.98 KL, ministry data showed on Friday.
Of the overall allotment for this year, 7.55 million KL is for the general public service obligation (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 price. The non-PSO allotment is set at 8.07 million KL," Bahlil stated, including the fund could not subsidise the cost gap between the palm oil and fossil fuels for the total allotment.
BPDPKS, the agency in charge of gathering and managing the palm oil funds, approximated in November B40 would need a 68% aid increase.
To assist fund 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 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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