Biodiesel allotment decree was waited for by market
Indonesia had planned to release higher biodiesel mix on Jan. 1
Palm oil standard agreement rose 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 signed a decree on Friday allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while giving the market till completion 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 actually prepared to release the necessary 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 press reporters, adding the federal government was working to increase the obligatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior authorities, 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 due to the fact that of technical obstacles linked to subsidies for the fuel.
The non-implementation on Jan. 1. had actually caused a 2.6% drop in the Malaysian palm oil criteria agreement on Thursday. On Friday, it recuperated by around 1%.
Fuel merchants and biodiesel manufacturers had actually said they were unable to prepare contracts for biodiesel circulation without the decree.
The biodiesel allocation for 2025 suggested an increase from 2024's approximated biodiesel usage of 12.98 KL, ministry information showed on Friday.
Of the overall allotment 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 nation's palm oil fund.
"The staying allocations will be cost market cost. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, adding the fund could not subsidise the price space in between the palm oil and nonrenewable fuel sources for the total allocation.
BPDPKS, the firm in charge of collecting and managing the palm oil funds, estimated in November B40 would require a 68% aid increase.
To help 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 take place, another main policy 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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