Government Prepares Bioethanol Industry Towards E20
JAKARTA – The government is promoting the development of the national bioethanol industry as part of efforts to strengthen energy security while increasing the added value of agricultural commodities.
The Ministry of Investment and Downstream Industry/BKPM considers bioethanol to be closely linked to the downstreaming agenda, energy transition, energy security and the strengthening of the national economy.
“The development of bioethanol is connected to four main agendas, namely energy security, downstreaming, energy transition and economic resilience. Indonesia has a variety of raw material sources, including sugarcane, cassava and sorghum, which can be further processed to generate added value domestically,” explained Deputy Minister of Investment and Downstream Industry/Deputy Head of BKPM Todotua Pasaribu, quoted from various sources, Tuesday (15/09/2026).
The statement was made following the inauguration of the Bioethanol Development Center in Tegineneng, Pesawaran Regency, Lampung, on Monday (14/09/2026).
The facility is the result of a collaboration between PT Pertamina New & Renewable Energy and PT Toyota Motor Manufacturing Indonesia to prepare industrial capacity ahead of the implementation of bioethanol-blended petrol up to E20.
Demand for bioethanol is expected to rise as national petrol consumption is projected to reach 39.7 million kilolitres by 2029.
At the initial implementation of E5, national bioethanol demand is estimated at 1.7 to 2 million kilolitres per year, while domestic fuel-grade production remains limited.
“The development of bioethanol for petrol complements the use of biodiesel for diesel fuel. The involvement of the automotive industry is important to support the connection between fuel development and the vehicle technologies that use it,” said Todotua.
The Bioethanol Development Center in Tegineneng uses a multi-feedstock concept with raw materials including molasses, sorghum and biomass waste.
The development centre has an initial capacity of 60 kilolitres and is targeted to begin production by December 2026 at the latest, before being scaled up to 60,000 kilolitres in 2027.
“So the public can also take part in planting. We can also run a cooperative concept. The cooperatives will later become raw material collection centres, while the facility here will act as the absorber or offtaker,” concluded Todotua.