Biodiesel allotment decree was waited for by industry

Indonesia had actually prepared to introduce greater biodiesel mix on Jan. 1

Palm oil criteria contract increased 1% after previous fall

Government goes 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 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while giving the industry till completion of next month to adjust to the greater level of the fuel in the mix.

Indonesia, the world's largest exporter of palm oil, had prepared to launch the necessary requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.

"The ministerial guideline has actually been signed," the minister Bahlil Lahadalia told reporters, adding the federal government was working to increase the compulsory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior authorities, said biodiesel manufacturers and fuel sellers will be given until Feb. 28 to adjust to the B40 mix. She stated the hold-up was because of technical obstacles 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 standard contract on Thursday. On Friday, it recovered by around 1%.

Fuel merchants and biodiesel producers had actually stated they were not able to draw up contracts for biodiesel circulation without the decree.

The biodiesel allowance for 2025 showed a boost from 2024's approximated biodiesel intake of 12.98 KL, ministry information showed on Friday.

Of the total allowance 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 allotments will be sold at market value. The non-PSO allocation is set at 8.07 million KL," Bahlil stated, including the fund could not subsidise the price gap between the palm oil and fossil fuels for the total allotment.

BPDPKS, the firm in charge of collecting and managing the palm oil funds, approximated in November B40 would need a 68% aid increase.

To help fund that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the existing 7.5%, however for that to occur, another official guideline is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati