decree was awaited by market

Indonesia had planned to release greater biodiesel mix on Jan. 1

Palm oil standard contract rose 1% after previous fall

Government goes 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 Minister signed a decree on Friday designating 15.6 million kilolitres (KL) of biodiesel for 2025 circulation, while giving the market until 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 planned 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 told press reporters, including the federal government was working to increase the compulsory biodiesel mix to 50% next year.

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

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

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

The biodiesel allowance for 2025 showed an increase from 2024’s estimated biodiesel intake of 12.98 KL, ministry information revealed 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 public transport, whose sales will be subsidised by the country’s palm oil fund.

"The staying allocations will be sold at market price. The non-PSO allowance is set at 8.07 million KL,” Bahlil stated, adding the fund could not subsidise the rate gap between the palm oil and nonrenewable fuel sources for the overall allowance.

BPDPKS, the firm in charge of gathering and handling the palm oil funds, approximated in November B40 would need a 68% aid boost.

To assist finance that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, however for that to take place, another official regulation is needed. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati