Biodiesel allocation decree was waited for by market
Indonesia had actually prepared to introduce higher biodiesel mix on Jan. 1
Palm oil benchmark agreement rose 1% after previous fall
Government aims 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 assigning 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while providing the market up until completion of next month to adjust to the greater level of the fuel in the mix.
Indonesia, the world's biggest exporter of palm oil, had prepared to introduce the mandatory 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 informed reporters, including 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 merchants will be provided until Feb. 28 to adjust to the B40 mix. She stated the delay was since of technical difficulties 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 agreement on Thursday. On Friday, it recuperated by around 1%.
Fuel sellers and biodiesel manufacturers had actually said they were unable to prepare agreements for biodiesel distribution without the decree.
The biodiesel allocation for 2025 suggested a boost from 2024's estimated biodiesel intake of 12.98 KL, ministry data showed on Friday.
Of the total allotment for this year, 7.55 million KL is for the public service responsibility (PSO), which covers sectors such as public transport, whose sales will be subsidised by the nation's palm oil fund.
"The remaining allocations will be cost market price. The non-PSO allowance is set at 8.07 million KL," Bahlil stated, including the fund could not subsidise the rate gap in between the palm oil and fossil fuels for the general allocation.
BPDPKS, the agency in charge of gathering and managing the palm oil funds, approximated in November B40 would need a 68% subsidy increase.
To help finance that, Indonesia plans to increase its export levy for unrefined palm oil (CPO) to 10% from the present 7.5%, however for that to occur, another main guideline 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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