Biodiesel allocation decree was awaited by industry

Indonesia had actually planned to launch higher biodiesel mix on Jan. 1

Palm oil criteria agreement 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 allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while offering the industry up until completion of next month to adjust to the higher level of the fuel in the mix.

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

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

Eniya Listiani Dewi, a ministry senior authorities, stated biodiesel manufacturers and fuel merchants will be given until Feb. 28 to adapt to the B40 mix. She said the delay was since of technical obstacles linked to aids for the fuel.

The on Jan. 1. had actually resulted in a 2.6% drop in the Malaysian palm oil criteria agreement on Thursday. On Friday, it recovered by around 1%.

Fuel retailers and biodiesel manufacturers had actually said they were not able to prepare agreements for biodiesel distribution without the decree.

The biodiesel allotment for 2025 showed a boost from 2024's approximated 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 commitment (PSO), which covers sectors such as public transport, whose sales will be subsidised by the nation's palm oil fund.

"The staying allowances will be cost market value. The non-PSO allotment is set at 8.07 million KL," Bahlil said, including the fund could not subsidise the price space between the palm oil and nonrenewable fuel sources for the overall allowance.

BPDPKS, the company in charge of gathering and managing the palm oil funds, approximated in November B40 would require a 68% aid increase.

To assist finance that, Indonesia prepares to increase its export levy for unrefined palm oil (CPO) to 10% from the current 7.5%, but for that to occur, another main guideline is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati