Government Teams Up with Toyota and PNRE to Accelerate Bioethanol Fuel Development in Lampung
The Ministry of Investment and Downstreaming/BKPM continues to drive the acceleration of the national energy transition through the development of the Bioethanol Project in Lampung Province.
This strategic project, scheduled to begin construction in the third quarter of 2026, is the result of collaboration between Toyota, PT Pertamina New & Renewable Energy (PNRE), and Danantara Investment Management.
Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM Todotua Pasaribu stated that his office has been intensively coordinating the project’s development for the past year.
“Currently, there is coordination between PNRE and the Japanese Group, in this case Toyota Tsusho will be appointed as the partner, supported by other technology partners from Japan such as RaBIT (a consortium of research from several Japanese automotive and energy companies),” said Todotua after leading a meeting with the CEO of Toyota Motor Asia in Jakarta on Monday, 20 April.
This development aligns with the directives of President Prabowo Subianto, who focuses government policy on three main pillars: energy self-sufficiency, food security, and downstreaming of natural resources.
Bioethanol offers benefits as an environmentally friendly fuel that helps reduce global warming.
Indonesia is considered to have a strong comparative advantage with the world’s largest nickel reserves at 42%, as well as its position as a major global producer of palm oil and coconuts, which have great potential as bioenergy raw materials.
Todotua explained that Lampung was chosen as the development location due to the abundant availability of raw materials (feedstock), such as sugarcane, cassava, and sorghum.
The project will be implemented in two phases: a pilot project phase with a capacity of 60 kilolitres per year in the third quarter of 2027, and a commercial phase of 60,000 kilolitres per year in the fourth quarter of 2028.
This development uses second-generation (2G) technology, which enables the utilisation of biomass waste such as palm oil, corn, and sorghum as raw materials.
In addition, the project will be supported by sorghum cultivation on 6,000 hectares of land owned by PTPN for commercial scale in 2027.
This step strengthens the government’s commitment to the mandatory bioethanol blending roadmap in fuel, namely E5 in 2026-2027, increasing to E10 in 2028-2030, and E20 in the long term.
“We are pushing this project to prepare for the commitment to the mandatory roadmap to become E10, so that our country is also ready,” said Todotua.
In addition, he highlighted the urgency of the energy transition given Indonesia’s high dependence on fuel imports, reaching 61% over the last decade, as well as the vulnerability of oil prices due to global geopolitical dynamics.
The government also appreciates Toyota’s contribution to advancing the electric vehicle battery industry in the country. However, the government assesses that there is still ample room for cooperation, especially regarding bioethanol development based on various raw materials.
“We appreciate the constructive and progressive discussions with relevant stakeholders to explore collaboration potential in the bioenergy ecosystem,” said CEO of Toyota Motor Asia Masahiko Maeda.
He also added that through strategic partnerships with CATL in Indonesia, Toyota aims to expand its capabilities, from battery pack assembly to battery cell and module manufacturing.
This aims to strengthen the local supply chain while supporting the company’s Multi-Pathway approach towards carbon neutrality.