Bahlil to build methanol plants in East Java and East Kalimantan for B50 needs

Energy and Mineral Resources Minister Bahlil Lahadalia has announced that the government will build methanol plants in East Java and East Kalimantan to meet the needs of the B50 biodiesel programme. ‘The methanol we need, just for B50, is around 2.5 million tonnes per year. Therefore, the next step is to encourage the immediate construction of a methanol industry,’ Bahlil said after the launch of the B50 Mandatory Biodiesel Programme in Karawang, West Java, on Thursday. Bahlil stated that the government will conduct a groundbreaking for the methanol plant in Bojonegoro, East Java, in July 2026. The plant in Bojonegoro will use gas as its raw material. Meanwhile, the government will also build a methanol plant in East Kalimantan that will use coal as feedstock. ‘The one in East Kalimantan is part of coal downstreaming,’ Bahlil said. He expressed hope that Indonesia can fulfil its methanol requirements for the B50 programme. ‘The emergence of B50 increases the need for methanol. This is a challenge that must be our shared concern, particularly for the Ministry of Energy and Mineral Resources,’ Bahlil added. In addition to increasing methanol demand, the B50 programme also raises the need for fatty acid methyl esters (FAME) from 14.9 million kilolitres under B40 to 16.7–18 million kilolitres under B50, and increases crude palm oil (CPO) demand from 13.6 million tonnes under B40 to 15.2–16.3 million tonnes under B50. According to Bahlil, the increased CPO demand can provide market certainty for oil palm farmers. ‘If CPO prices are low abroad and other countries do not want it, we can simply allocate a portion to build B50, so that prices for farmers rise, industry rises, and the nation prospers,’ Bahlil said. President Prabowo Subianto officially launched the B50 Mandatory Biodiesel Programme at KM 57 Rest Area on the Jakarta-Cikampek Toll Road, Karawang, West Java, on Thursday. The legal basis for the B50 programme is Minister of Energy and Mineral Resources Regulation Number 4 of 2025 concerning the Business and Utilisation of Biofuels and Ministerial Decree Number 257.K/EK.01/MEM.E/2026 concerning the Mandatory Blending of 50 Percent Biodiesel Biofuel with Diesel Fuel Oil. The B50 programme mandates a 50 percent biodiesel blend into diesel fuel. In its implementation, biofuel business entities, fuel oil business entities, and distributing business entities are required to apply standards and quality in accordance with established specifications.