Indonesia to Mandate E20 Bioethanol, Pertamina Secures Feedstock Strategy
Pertamina New and Renewable Energy (NRE) is preparing various strategies to secure the supply of raw materials for petrol blended with 20% bioethanol (E20), aligning with the government’s plan to enforce the bioethanol mandate.
Pertamina NRE CEO John Anis explained the company is employing three main strategies: multi-feedstock, multi-generation, and multi-region. He stressed that the success of the bioethanol mandate depends heavily on the availability of sustainable feedstock that does not compete with food security.
The company is currently optimising the use of molasses as a primary feedstock. However, due to limited national molasses volume, Pertamina is diversifying by exploring cassava and sweet sorghum. The firm has also begun collaborating with state-owned plantation company PTPN to reactivate a facility in Lampung.
Furthermore, Pertamina is developing second-generation bioethanol derived from agricultural waste. This approach aims to reduce production costs significantly, as waste-based feedstock is much cheaper and avoids competition with food consumption needs.
Regarding the multi-region strategy, the company is building processing facilities in various strategic areas with abundant feedstock potential, such as East Java, Lampung, and Sulawesi. Synergy with other state-owned enterprises like PTPN and SGN is being strengthened to ensure a smooth supply chain from upstream to downstream.
Meanwhile, the Ministry of Energy and Mineral Resources (ESDM) is preparing a road test for E20 fuel. Director General of New, Renewable Energy and Energy Conservation, Eniya Listiani Dewi, stated that communication with the Association of Indonesian Automotive Industries (Gaikindo) is underway to begin engine testing soon. The road test aims to assess the readiness of the national automotive industry infrastructure before the E20 mandate takes effect in 2028.
Before implementing E20, the government is focusing on the immediate rollout of the 5% bioethanol mandate (E5) this year. Eniya noted that the E5 mandate must be enforced before December to meet the target of increasing the blend to 10% (E10) by early 2027. The implementation of E5 is currently awaiting the issuance of a Ministerial Decree on volume allocation, while supporting regulations, including a finance ministry regulation on excise exemption and simplified business licensing for fuel blending, have been completed.
The ministry is also overseeing infrastructure readiness at PT Pertamina, particularly the cleaning of reactors to ensure smooth E5 distribution. Technical testing by Lemigas on ethanol blending with various petrol octane ratings is ongoing to determine the most suitable market specifications.
Eniya expressed confidence that modern vehicle engine technology can handle ethanol blends of up to 30%, but the government will conduct measured trials to ensure the energy transition in the transport sector delivers optimal efficiency benefits to the public.