Indonesia allocates 15,65 million kilolitres for biodiesel in 2026

An official from the Indonesia Energy and Mineral Resources Ministry told us on Tuesday that the Ministry had signed a decree allowing it to allocate 15.65 million kilograms of palm biodiesel in order to meet its fuel blend mandate by 2026.

7,45 million KL of the total allocation has been allocated for public service obligations (PSO), covering sectors like public transportation, whose sales are subsidised by the palm oil fund.

Eniya Dewi, from the Energy and Mineral Resources Ministry, stated that the non-PSO allotment, which will sell at market price, has been set?at 8,20 million KL.

Indonesia allocated 15.6 million kilolitres (only slightly less than last year) of palm oil fuel to 2025.

As part of its effort to reduce its dependence on imported fossil fuels, the?Southeast Asian nation has introduced a palm oil blend that is mandatory for diesel. It plans to increase this share?to 50 percent starting next year.

Early December, Indonesia began road tests of the "B50 blend" and are expected to last six months. Energy Minister Bahlil lahadalia reiterated that mandatory use of "B50" will begin in the second quarter of 2026.

APROBI, a group of biodiesel producers, has stated that the plan to implement B50 could require as much as?19m kilolitres per year in palm oil fuel.

Ernest Gunawan is the secretary general of APROBI. He said: "This will only happen if road test results are good and raw materials are available in sufficient quantities."

He added that "a revision of the ministerial order (for quantity) will be made in the second term to adapt to the needs for?B50."

Indonesian palm oil inventories at the end of October were down 10% from one month earlier, to 2,33 million metric tonnes. This was despite a rise in production.

The domestic consumption grew by 8.5%, to 2,22 million tonnes. This was mainly due to the increase in biodiesel consumption and food consumption.

Indonesia, which is the largest producer of palm oils in the world, could regulate the exports to ensure that there are enough supplies to make biodiesel. (Reporting and editing by David Stanway; Dewi Kurniawati)

(source: Reuters)