Finance Minister Purbaya revises ethanol excise exemption rules

Finance Minister Purbaya Yudhi Sadewa has issued new regulations altering the excise exemption process for ethanol or ethyl alcohol to support the energy transition. Previously, PT Pertamina Patra Niaga had requested simplified bioethanol excise exemption requirements. The new policy is outlined in Finance Ministry Regulation No. 34 of 2026, enacted on 25 May 2026. This regulation amends PMK No. 82 of 2024 on Excise Exemption Procedures. ‘To support the government’s national energy resilience programme and achieve clean energy transition and utilisation through the blending of excisable goods such as ethyl alcohol with petroleum refinery products,’ states the ‘whereas’ section of PMK No. 34, cited on Thursday, 28 May 2026. The new PMK adds one clause to Article 8 of the previous regulation. This provision broadens the scope of industries eligible for simplified excise exemption procedures. Blending petroleum refinery products with excisable ethyl alcohol is now classified and recognised as a manufacturing or processing industry activity, enabling compliance with administrative requirements for excise exemption. Ethanol is subject to strict regulations as it falls under excisable goods like alcoholic beverages. However, as it is required for fuel blending such as bioethanol, the government has eased regulations specifically for this industry. During a recent February investment bottleneck meeting, Purbaya addressed PT Pertamina Patra Niaga’s complaints regarding licensing hurdles. Pertamina proposed amending PMK No. 82 of 2024 and Directorate General of Customs and Excise Regulation No. PER 13/BC/2024 to simplify bioethanol excise exemption requirements. PT Pertamina Deputy Director Oki Muraza stated that the Industrial Business License (IUI) requirement was the main obstacle in applying for bioethanol excise exemption. He noted that licensing processes, including Amdal, could take up to three years per location. Furthermore, the government will adopt a new Indonesian Standard Industrial Classification (KBLI) code 19206, specifically categorising the blending of petroleum refinery products with biofuel (bioethanol) as a processing industry activity. ‘However, we do require some regulatory adjustments or PMK changes. This will reduce the need for individual licensing processes we currently undertake,’ said Oki, as quoted by Antara.