Energy Ministry Reveals Latest on Indonesia's 5% Bioethanol Fuel Programme
The Ministry of Energy and Mineral Resources (ESDM) has revealed the latest developments regarding the programme to blend 5% bioethanol into petrol, known as E5. The programme was previously targeted to commence in the second half of 2026.
Director General of New, Renewable Energy and Energy Conservation (EBTKE) at the Ministry of ESDM, Eniya Listiani Dewi, stated that her party is currently encouraging all business entities to build bioethanol plants in various regions. “For ethanol, we are encouraging all business entities to establish bioethanol plants in every province, on every island. The concept is that they plant first. We are pushing for the provision of land for bioethanol or land for energy,” she said in Jakarta on Tuesday (7/7/2026).
According to her, one of the obstacles to bioethanol development has now been overcome. The government has removed the excise duty on ethanol following the official issuance of a Minister of Finance Regulation (PMK). “The PMK is completed. Therefore, the ethanol excise is no more. The things that were entangling and complicated are now gone. What remains is to determine the volume and the model,” she said.
However, the implementation of the E5 programme is still awaiting a decision from the Minister of ESDM. The government will also consider the readiness of domestic bioethanol supply before the policy is enacted. “With the excise being removed, it can serve as an investment reference. The materials needed are sugarcane bagasse, corn cobs, bitter cassava, and other potential sources like sugar palm, sorghum, and sago,” she added.
Based on data from the Directorate General of EBTKE, the implementation of E5 in 2026 is planned for six regions: East Java, DKI Jakarta, West Java, Banten, Central Java, and the Special Region of Yogyakarta (DIY). The Directorate General of EBTKE plans to expand the coverage area in subsequent years. For instance, in 2027 the E5 programme will be expanded to include Bali. Starting in 2028, the bioethanol blend ratio will be increased to 10% (E10) while maintaining the same coverage area. From 2029 to 2030, the E10 implementation will be expanded further by including Lampung as a new region, bringing the total to eight regions.