Jakarta: Indonesia has announced a transition period of one and a half months for companies to comply with the new B40 biodiesel requirement, according to Deputy Energy and Mineral Resources Minister Yuliot Tanjung. The country’s initial plan was to introduce a mandatory 40% palm oil blend in biodiesel starting January 1, but industry officials noted they are still awaiting technical regulations.
Currently, Indonesia, the world’s largest exporter of palm oil, mandates a 35% biodiesel blend. The transition period began on January 1, Yuliot confirmed.
Market players are awaiting the official decree, which will specify the amount of biodiesel to be allocated to fuel retailers, helping them understand the potential impact on palm oil exports. Fuel retailers and biodiesel producers have stated that they are unable to finalize contracts for biodiesel distribution until the decree is issued.
Yuliot did not provide a timeline for the decree’s release but mentioned that it would be announced by the energy minister “hopefully soon.” Dadan Kusdiana, the ministry’s secretary general, added that the approval process for biodiesel allocation is nearing completion.
The government has stated its intention to allocate 15.6 million kiloliters of biodiesel this year.
The delay in the announcement caused the Malaysian palm oil benchmark to fall by 2.6% on Thursday, though it had recovered by around 1% by Friday morning, as of 0632 GMT.
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