CORE: One million tonnes of molasses available for bioethanol development

Economist Eliza Mardian from the Center of Reform on Economics (CORE) Indonesia has stated that one million tonnes of molasses are available for bioethanol development. “Total national molasses production is around 1.9 million tonnes per year. Only 900,000 tonnes have been absorbed, leaving one million tonnes that could potentially be used,” Eliza said when contacted by ANTARA in Jakarta on Sunday. However, she noted that the majority of molasses supply originates outside Java, while processing facilities are located on the island, creating logistical cost challenges. Eliza also highlighted the national capacity to produce fuel-grade ethanol (FGE) with a purity above 99 per cent suitable for blending with petrol. “Actual domestic production is only around 26,000 kilolitres per year, coming from three main companies in Lampung, Yogyakarta, and Solo,” she said. The total installed capacity of all ethanol plants nationwide reaches 303,000 kilolitres, with actual utilisation at approximately 172,000 kilolitres. “Most of this is still allocated for non-fuel industrial needs such as cosmetics, pharmaceuticals, and food,” Eliza explained. She assessed that this situation reflects limited raw material supply and industrial infrastructure that is not yet ready to support a large-scale mandatory blending programme in the near term. Therefore, to implement bioethanol policies ranging from E5 to E20 on a national scale, Eliza stressed the importance of massive investment in the bioethanol supply chain and infrastructure over the next few years. “The success of implementing E5, E10, and even E20 will depend heavily on policy scenarios to increase sugarcane productivity, as well as enforcing the blending mandate with offtake certainty by Pertamina,” she said. This approach would allow the gap between fuel-grade ethanol production capacity and blending requirements to be closed gradually without relying on ethanol imports. Minister of Energy and Mineral Resources Bahlil Lahadalia stated that the government is targeting the implementation of a 10 per cent ethanol blend in fuel (E10) starting in 2027 as an initial phase before transitioning to E20. He said the government has been reviewing the mandatory ethanol policy since 2025, with the study nearly complete and serving as the basis for drafting an E20 roadmap targeted for a phased rollout through 2028–2029. According to Bahlil, the ethanol blending policy aims to reduce Indonesia’s dependence on imported fuel, particularly petrol.