Biodiesel allotment decree was waited for by market
Indonesia had actually planned to launch greater biodiesel mix on Jan. 1
Palm oil criteria agreement increased 1% after previous fall
Government goes 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 circulation, 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 planned to introduce 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 informed press reporters, adding 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 sellers will be provided up until Feb. 28 to adapt to the B40 mix. She said the hold-up was because of technical obstacles linked to subsidies for the fuel.
The non-implementation on Jan. 1. had caused a 2.6% drop in the Malaysian palm oil standard contract on Thursday. On Friday, it recuperated by around 1%.
Fuel merchants and biodiesel manufacturers had actually said they were not able to prepare agreements for biodiesel circulation without the decree.
The biodiesel allotment for 2025 suggested a boost from 2024's approximated biodiesel consumption of 12.98 KL, ministry information revealed on Friday.
Of the total allocation for this year, 7.55 million KL is for the general public service commitment (PSO), which covers sectors such as mass transit, whose sales will be subsidised by the oil fund.
"The remaining allocations will be cost market value. The non-PSO allowance is set at 8.07 million KL," Bahlil said, including the fund could not subsidise the cost space in between the palm oil and nonrenewable fuel sources for the total allocation.
BPDPKS, the firm in charge of collecting and handling the palm oil funds, approximated in November B40 would require a 68% aid increase.
To help 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 happen, another official guideline is needed. (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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