Pupuk Indonesia pushes for methanol plant construction to support B50 mandate
Jakarta (ANTARA) - PT Pupuk Indonesia (Persero) is promoting the construction of a methanol plant as part of supporting the implementation of the mandatory B50 biodiesel programme, which the government has planned to strengthen national energy resilience.
Pupuk Indonesia’s President Director, Rahmad Pribadi, stated that his company, together with Danantara, is proposing the construction 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, so that we will have from the state-owned enterprise Pupuk Indonesia a production capacity of 2 million tonnes and from the private sector 400,000 tonnes,” Rahmad said during a working meeting with Commission XI of the House of Representatives (DPR RI) in Jakarta on Thursday.
He stated that this step is also in line with the government’s efforts to enhance food security as well as sustainable energy security. The plan to build the plants will be carried out in the regions of Aceh and East Kalimantan.
Rahmad explained that biofuel development does not only require palm oil, but also methanol as a supporting material in its 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 plan to increase the biodiesel mandate from B40 to B50, methanol demand is projected 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 to 2.5 million tonnes,” Rahmad emphasised.
Previously, Coordinating Minister for the Economy Airlangga Hartarto stated that Indonesia will implement the Biodiesel 50 (B50) policy or a 50 per cent blend of crude palm oil with diesel fuel to save subsidies worth Rp48 trillion.
“As part of efforts for energy independence and energy efficiency, the government is implementing the B50 policy. This will take effect from 1 July 2026,” Airlangga said.
He conveyed that PT Pertamina is ready to implement the policy.
The B50 implementation policy, according to Airlangga, has the potential to reduce the use of fossil diesel fuel by 4 million kilolitres in one year.
“Of course, in six months there will be savings from fossil fuels and also subsidy savings from biodiesel estimated at Rp48 trillion,” Airlangga said.
Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia stated that with the implementation of B50, Indonesia will experience a diesel surplus in 2026.