Biodiesel allocation decree was waited for by market
Indonesia had planned to launch greater biodiesel mix on Jan. 1
Palm oil criteria agreement increased 1% after previous fall
Government aims for 50% biodiesel mix in 2026
( 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 distribution, while giving the industry up until completion of next month to adapt to the higher level of the fuel in the mix.
Indonesia, the world's largest exporter of palm oil, had planned to launch the mandatory 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 federal government was working to increase the obligatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, stated biodiesel manufacturers 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 caused a 2.6% drop in the Malaysian palm oil standard contract on Thursday. On Friday, it recuperated by around 1%.
Fuel retailers 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 suggested an increase from 2024's estimated 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 obligation (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 sold at market price. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, including the fund might not subsidise the rate gap in between the palm oil and nonrenewable fuel sources for the overall allowance.
BPDPKS, the company in charge of gathering and handling the palm oil funds, approximated in November B40 would need a 68% aid increase.
To assist finance that, Indonesia plans to increase its export levy for crude palm oil (CPO) to 10% from the existing 7.5%, however for that to take place, another main policy 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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