Government Targets E20 Implementation by 2028, Potentially Reducing Petrol Imports by 8 Million KL

The government is targeting the implementation of a 20% ethanol blend in petrol, or E20, by 2028. This policy aims to reduce dependence on oil imports. Minister of Energy and Mineral Resources Bahlil Lahadalia stated that the E20 implementation is inspired by the success of the mandatory biodiesel programme, which has now reached B40, a 40% blend of palm oil with diesel. “If we mandate 20% (ethanol), it means we can reduce petrol imports by 8 million kilolitres (KL),” he revealed in a written statement on Sunday (3/5/2026). Meanwhile, domestic oil production is only around 600,000 barrels per day, so Indonesia still imports about 1 million barrels of fuel per day. According to Bahlil, Indonesia has abundant potential for ethanol raw materials, ranging from cassava, corn, to sugarcane. Therefore, the government views the ethanol blending programme as a new strategy to strengthen national energy resilience. He also mentioned having studied the ethanol blending implementation in Brazil, which has long implemented such a policy. “The raw materials, such as cassava, corn, and sugarcane, are abundantly available in Indonesia,” said Bahlil. In addition to developing E20, the government is preparing other energy diversification efforts to reduce imports, including the development of Compressed Natural Gas (CNG) as an alternative to Liquefied Petroleum Gas (LPG) for households. This is because Indonesia imports 7.47 million metric tonnes (MT) of LPG per year. This situation arises because domestic production is only around 1.94 MT, which only meets one-fifth of national needs. Moreover, LPG subsidies consume nearly Rp80 trillion to Rp87 trillion per year from the state budget. This CNG technology has already been trialled in restaurants and several kitchens for the free nutritious meal programme, and it is being prepared for the household market.