Biodiesel allotment decree was awaited by market
Indonesia had planned to introduce greater biodiesel mix on Jan. 1
Palm oil standard contract 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 designating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while giving the industry until the end of next month to adjust to the higher level of the fuel in the mix.
Indonesia, the world's biggest exporter of palm oil, had actually prepared 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 press reporters, including the federal government was working to increase the necessary biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, stated biodiesel producers and fuel retailers will be given till Feb. 28 to adapt to the B40 mix. She said the hold-up was due to the fact that 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 Malaysian palm oil benchmark contract on Thursday. On Friday, it recovered by around 1%.
Fuel retailers and biodiesel manufacturers had actually stated they were unable to prepare contracts for biodiesel distribution without the decree.
The biodiesel allocation for 2025 showed an increase from 2024's estimated biodiesel consumption of 12.98 KL, ministry information showed on Friday.
Of the total 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 country's palm oil fund.
"The staying allowances will be sold at market value. The non-PSO allowance is set at 8.07 million KL," Bahlil said, including the fund might not subsidise the rate gap between the palm oil and nonrenewable fuel sources 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 boost.
To assist finance that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the existing 7.5%, however for that to happen, another main policy is needed. (Reporting by Bernadette Christina Munthe, Nangoy, Dewi Kurniawati
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Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Lanny Forrest edited this page 2025-01-12 12:19:07 +11:00