Government Prepares Incentives for Toyota
The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) has assured the provision of an incentive package for the Toyota Group for the bioethanol plant construction project in Lampung. This step is taken to accelerate the readiness of national energy infrastructure ahead of the implementation of the E10 mandate in 2028.
Deputy Minister of Investment and Downstreaming, Todotua Pasaribu, revealed that the incentives include tax holiday facilities and import duty exemptions (masterlist). This certainty emerged following a strategic meeting between the Ministry of Investment and Downstreaming/BKPM and Toyota Asia CEO, Masahiko Maeda, in Jakarta on Monday (20/4/2026).
“The incentives are certain; first, for all investments in Indonesia, we indeed provide incentives in the form of masterlist and tax holiday,” said Todotua during a press conference at the BKPM office after the meeting.
The project, scheduled to start construction in the second half of 2026, will have an initial production capacity of 60,000 kilolitres per year. Meanwhile, the current national ethanol production capacity is estimated at around 120,000 kilolitres per year, with an effective capacity of about 80,000 kilolitres.
Todotua emphasised that accelerating the construction is crucial given the limited time until the E10 mandate in 2028, while physical plant construction requires considerable time.
“This project must be started seriously because 2028 at the latest is a very short time. And building a plant takes time, so this year we must already do it,” he stated.
The government also plans to adopt the success of the B40–B50 biofuel policy to encourage bioethanol penetration in the domestic market. In addition to fiscal support, the project will be carried out through a consortium between Pertamina New Renewable Energy (Pertamina NRE) and Toyota Tsusho, with financing support from Danantara.
From an operational perspective, Toyota is considered a strategic partner that already has engine technology readiness to consume ethanol fuel. This aligns with Toyota Asia’s commitment to providing various types of environmentally friendly vehicles, both passenger and commercial, in the Indonesian market.
Toyota Asia CEO, Masahiko Maeda, stated that his side is ready to support the direction of the Indonesian government’s policy, including in the development of new energy-based vehicles, both for passenger and commercial vehicles.
“In the end, together with the Indonesian government, we are ready to provide the various types of vehicles that we have. That is our commitment,” added Maeda.
In addition to sugarcane and cassava as main raw materials, the project is projected to expand into sorghum land development to ensure supply sustainability. With cross-sector collaboration and technology assistance from Japan (METI), this project is expected to become a main pillar in realising energy independence and a renewable energy mix in the country.