Indonesia Allocates 13.41 Million kL of Biodiesel for 2024 B35

Jakarta — Indonesia allocated 13.41 million kilolitres of biodiesel for 2024 to maintain the nationwide B35 mandate throughout the year. The volume was about 2% higher than the 13.15 million kL allocation for 2023 and was assigned to government-appointed biofuel producers and fuel distributors.

The allocation was established under Directorate General of New, Renewable Energy and Energy Conservation (EBTKE) Decree No. 149.K/EK.05/DJE/2023. Dated 29 November 2023, the document set out the companies, volumes, and destination depots for domestic biodiesel procurement in 2024.

B35 continues with a larger allocation

Indonesia began nationwide implementation of the 35% biodiesel blend, known as B35, on 1 February 2023. The government did not raise the blending rate for 2024, but increased the allocated volume to follow expected demand for diesel blended with biodiesel.

Of the 13.41 million kL total, about 7.46 million kL was allocated to the public service obligation, or PSO, segment. This segment covers subsidised biodiesel blend (Biosolar) distribution. The remaining volume, approximately 5.95 million kL, was intended for non-PSO supply. The split shows that the mandate covers both subsidised consumption and commercial or industrial activity.

An allocation is not the same as realised distribution. Actual volumes still depend on diesel demand, biodiesel production readiness, shipping schedules, storage capacity, and blending operations at fuel terminals. The programme's performance must therefore be assessed through deliveries during the year, rather than only through the initial allocation.

Supply-chain execution is the key test

The allocation decree links biodiesel producers with destination depots. This arrangement is important because biodiesel must be shipped from plants to terminals across the Indonesian archipelago before it is blended with fossil diesel. Transport distance, vessel or truck availability, tank conditions, and receiving schedules can all affect distribution.

B35 implementation also requires quality control across the supply chain. Biodiesel must meet government specifications during storage and transport before blending. At terminals, volume and quality records are needed to verify the blend and account for deliveries.

The increase of roughly 260,000 kL from the 2023 allocation indicates that domestic biodiesel demand continued to grow. The rise was nevertheless limited because the government retained the B35 blending rate. Changes in required volume mainly reflected projected diesel consumption and distribution planning.

What the allocation means for palm oil

Indonesia's biodiesel uses FAME produced mainly from palm oil. At 13.41 million kL, the B35 programme remained a major source of domestic demand for the palm-oil supply chain. Its effect on crude palm oil and fresh fruit bunch prices cannot be viewed in isolation, as the market is also shaped by production, exports, stocks, competing vegetable oils, and energy prices.

For the government, the mandate is intended to reduce fossil diesel use and increase the utilisation of domestic energy. For producers and distributors, the 2024 priority is to meet the assigned volume with consistent quality and delivery schedules. The allocation describes the scale of the programme, while realised distribution will determine the final result.

The figure also provides a starting point for assessing Indonesia's readiness for higher blending rates. The official 2024 decision, however, remains a B35 allocation; any discussion of a subsequent blend must be kept separate from the volume formally assigned for this year.