Biodiesel allowance decree was awaited by industry

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

Palm oil standard contract increased 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while giving the industry until the end 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 actually planned to launch the mandatory 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 told press reporters, including the federal government was working to increase the mandatory biodiesel mix to 50% next year.

Eniya Listiani Dewi, a ministry senior official, stated biodiesel producers and fuel retailers will be offered until Feb. 28 to adapt to the B40 mix. She stated the delay was because of technical difficulties linked to aids for the fuel.

The non-implementation on Jan. 1. had led to a 2.6% drop in the Malaysian palm oil standard contract on Thursday. On Friday, it recuperated by around 1%.

and biodiesel producers had actually said they were not able to prepare agreements for biodiesel circulation without the decree.

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

Of the overall allocation for this year, 7.55 million KL is for the public service obligation (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country's palm oil fund.

"The remaining allocations will be cost market price. The non-PSO allocation is set at 8.07 million KL," Bahlil said, adding the fund could not subsidise the rate gap in between the palm oil and fossil fuels for the overall allowance.

BPDPKS, the agency in charge of collecting and managing the palm oil funds, estimated in November B40 would require a 68% aid increase.

To assist fund that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the existing 7.5%, but for that to occur, another main policy is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D'Souza, Shri Navaratnam and Barbara Lewis)