Government Advances Bioethanol Project in Lampung with Toyota to Promote Energy Transition
The government, through the Ministry of Investment and Downstreaming/BKPM, continues to promote the formation of strategic agreements for the development of the Bioethanol Project in Lampung Province as part of efforts to accelerate the national energy transition. Construction of the project, expected to begin in the third quarter of 2026, involves Toyota, PT Pertamina New & Renewable Energy (PNRE), and Danantara Investment Management.
“This programme has actually been running for a year now, but we have been quiet in its development. Currently, there is coordination between PNRE and the Japanese Group, in this case Toyota Tsusho, which will be appointed as the partner, supported by other technology partners from Japan such as RaBIT (a research consortium of several Japanese automotive and energy companies),” explained Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM Todotua Pasaribu after leading a meeting with the CEO of Toyota Motor Asia in Jakarta (20/4).
Deputy Minister Todotua explained that the project will initially be built in the Lampung region. Lampung was chosen because it is one of the provinces with a strong supply of feedstock, such as sugarcane, cassava, sorghum, and others. Specifically, the Ministry of Investment and Downstreaming/BKPM has been providing guidance since the end of 2025 to early 2026 through a series of concrete steps, including cross-ministry/institutional and SOE coordination, facilitating meetings with Japanese technology partners, to direct accompaniment in field visits and project site identification.
The bioethanol development project being explored with Toyota, PNRE, and Danantara Investment Management is designed in two phases. The initial phase (pilot project) is targeted at a capacity of 60 kilolitres per year in the third quarter of 2027, followed by the commercial phase of 60,000 kilolitres per year in the fourth quarter of 2028. This development adopts a multi-feedstock approach, utilising palm oil biomass waste, maize, and sorghum, supported by second-generation (2G) technology to increase supply flexibility while ensuring long-term sustainability.
This development also includes gradual sorghum cultivation, starting from a 10-hectare pilot in 2026 to commercial development reaching 6,000 hectares in 2027. The project will be located in Lampung with land support from PTPN.
On the policy side, the government has strengthened its commitment through a mandatory biofuel blending roadmap, namely E5 in 2026–2027, increasing to E10 in 2028–2030, and heading towards E20 in the long term.
“We are promoting this project to prepare for the mandatory roadmap commitment to E10, so that our country is also ready,” said Deputy Minister Todotua.
Deputy Minister Todotua added that Indonesia’s dependence on fuel imports remains high, at around 61% over the past decade. On the other hand, the volatility of world oil prices due to geopolitical dynamics further underscores the urgency of the energy transition.
In line with President Prabowo Subianto’s directives, the government is focusing policies on three main pillars: energy self-sufficiency, food security, and downstreaming of natural resources. Indonesia is considered to have strong comparative advantages, including the world’s largest nickel reserves (42%), as well as its position as a major global producer of palm oil and coconuts that have the potential to become bioenergy raw materials.
The government also appreciates Toyota’s involvement in developing the electric vehicle battery industry in Indonesia. However, opportunities for cooperation are still wide open, especially in the development of multi-feedstock bioethanol.
“We appreciate the constructive and progressive discussions with relevant stakeholders to explore collaboration potential in the bioenergy ecosystem. In addition, through our strategic partnership with CATL (Contemporary Amperex Technology Co., Limited) in Indonesia, we aim to expand our capabilities from battery pack assembly to battery manufacturing from cells and modules. This collaboration will strengthen a robust local supply chain, supporting Toyota’s Multi-Pathway approach towards carbon neutrality,” said CEO of Toyota Motor Asia Masahiko Maeda.
This meeting is part of the government’s ongoing efforts to strengthen international collaboration to encourage quality investment and accelerate Indonesia’s economic transformation based on downstreaming and sustainable energy.