Cooperatives to Become Bioethanol Feedstock Procurement Hubs — Here's the Scheme

JAKARTA — The government is preparing a cooperative scheme to strengthen the supply chain of raw materials for the national bioethanol industry. The scheme will connect farmers as feedstock suppliers with bioethanol processing facilities that will absorb their output.

Deputy Minister of Investment and Downstream Industry/Deputy Head of BKPM Todotua Pasaribu said the development of the bioethanol industry requires linkage between the agricultural sector and processing industries. According to him, farmers need market certainty, while industry needs sufficient and sustainable feedstock supplies.

“So communities can also take part in planting. The cooperative concept is one we can implement. Cooperatives will later become feedstock collection centres, while the facilities here will act as the absorbers or offtakers,” Todotua said in an official statement on Tuesday (15/9/2026).

He explained that the scheme forms part of efforts to build a bioethanol industrial ecosystem from upstream to downstream. With cooperatives in place, agricultural produce from communities can be consolidated before being channelled to processing facilities.

According to Todotua, bioethanol development also opens opportunities for communities to participate in feedstock provision. Indonesia has a number of commodities with potential to be developed as bioethanol feedstock, such as sugarcane, cassava and sorghum.

“This bioethanol development is linked to four main agendas, namely energy security, downstream processing, energy transition and economic resilience,” he said.