Pupuk Indonesia Proposes Methanol Plant Construction to Support B50 Implementation

PT Pupuk Indonesia (Persero) is advocating for the construction of a methanol plant to support the implementation of the mandatory B50 biodiesel programme launched by the government to strengthen national energy resilience. Pupuk Indonesia’s President Director, Rahmad Pribadi, stated that the company, together with Danantara, is proposing the building of two methanol plants, each with a capacity of 1 million tonnes, to meet domestic needs and reduce import dependency. “We, together with Danantara, are proposing the construction of two methanol plants, each with a capacity of 1 million tonnes. Thus, the state-owned enterprise Pupuk Indonesia will have a production capacity of 2 million tonnes, and the private sector 400,000 tonnes,” Rahmad said during a working meeting with Commission XI of the House of Representatives in Jakarta on Thursday (2/4/2026). He stated that this step is also in line with the government’s efforts to enhance food security as well as sustainable energy resilience. The plant construction plan will be carried out in the regions of Aceh and East Kalimantan. Rahmad explained that biofuel development not only requires palm oil but also methanol as a supporting material in the production process. He mentioned that the national methanol requirement in 2025 is estimated to reach 1.8 million tonnes, while domestic production capacity is only around 400,000 tonnes. This situation causes Indonesia to still rely on methanol imports of 1.4 million tonnes to meet growing domestic needs. With the planned increase in the biodiesel mandate from B40 to B50, methanol demand is expected to rise significantly to around 2.9 million tonnes. Without additional domestic production capacity, methanol imports are projected to increase to around 2.5 million tonnes. “Without an increase in domestic methanol production capacity, methanol imports will rise from 1.4 million tonnes to 2.5 million tonnes,” Rahmad emphasised.