For B50, Pupuk Indonesia Plans to Build Methanol Plants in Aceh and East Kalimantan

State-owned enterprise PT Pupuk Indonesia (Persero) has announced plans to build two methanol plants in Aceh and East Kalimantan (Kaltim) to meet the domestic needs for biodiesel. President Director of PT Pupuk Indonesia, Rahmad Pribadi, stated that the government’s policy to implement B50—or 50 per cent diesel and 50 per cent biodiesel—by 2026 requires two methanol plants. Methanol serves as a reactant in the process of converting crude palm oil (CPO) into biodiesel. “We have been tasked with supporting the transition to B50, where B50 requires two methanol plants to convert CPO (crude palm oil) into biofuel,” Rahmad said during a working meeting with Commission IV of the House of Representatives (DPR RI) at the Parliamentary Complex in Senayan, Jakarta, on Tuesday (7/4/2026). The import volume is estimated to nearly double if the government does not build its own methanol plants. “Without this construction, our imports will increase to 2.5 (million tonnes),” Rahmad stated. Currently, Rahmad noted that PT Pupuk Indonesia has received the task from the Ministry of Agriculture to build these plants. Additionally, the Investment Management Agency (BPI) Danantara, as the superholding for State-Owned Enterprises (BUMN), has given the green light. The plants will be built in Lhokseumawe, Aceh, and Bontang, East Kalimantan. “The locations already have infrastructure in place, including ports, and the feasibility study has been completed. For gas supply, we have an MoU with Mubadala Energy, and progress is ongoing with East Kalimantan,” Rahmad explained. The current domestic methanol production capacity is only 400,000 tonnes. He mentioned that the mandatory implementation of B50, transitioning from the current B40, will significantly increase methanol needs to 2.9 million tonnes. “Without an increase in domestic methanol production capacity, imports will rise from 1.4 to 2.5 million tonnes,” Rahmad emphasised.