mission-newenergy-ltd

1 Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025

Biodiesel allocation decree was waited for by industry

Indonesia had prepared to launch greater on Jan. 1

Palm oil standard contract increased 1% after previous fall

Government intends 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 distribution, while offering the market up until the end 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 federal 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 merchants will be offered up until Feb. 28 to adjust to the B40 mix. She said the hold-up was since of technical challenges linked to subsidies for the fuel.

The non-implementation on Jan. 1. had resulted in a 2.6% drop in the Malaysian palm oil benchmark agreement on Thursday. On Friday, it recuperated by around 1%.

Fuel merchants and biodiesel manufacturers had actually said they were not able to draw up agreements for biodiesel distribution without the decree.

The biodiesel allocation for 2025 showed an increase from 2024's approximated biodiesel intake of 12.98 KL, ministry data showed on Friday.

Of the overall allowance for this year, 7.55 million KL is for the general public service commitment (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country's palm oil fund.

"The remaining allocations will be offered at market value. The non-PSO allowance is set at 8.07 million KL," Bahlil stated, adding the fund might not subsidise the rate gap in between the palm oil and nonrenewable fuel sources for the general allowance.

BPDPKS, the agency in charge of collecting and handling 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 unrefined palm oil (CPO) to 10% from the existing 7.5%, however for that to happen, another official guideline is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati