Pupuk Indonesia to Build Two Methanol Plants for B50

Chief Executive Officer of PT Pupuk Indonesia (Persero), Rahmad Pribadi, has revealed plans to build two methanol plants to support the 50% biodiesel or B50 programme. “We will build this, one in Lhokseumawe, and another in Bontang,” Rahmad stated during a meeting with Commission IV of the House of Representatives at the parliamentary complex in Senayan, Jakarta, on Tuesday, 7 April 2026.

Rahmad explained that the methanol plants will convert crude palm oil or CPO into biofuel. This is because the current domestic methanol needs still rely on imports amounting to around 1.5 million tonnes. Without the addition of these two plants, Rahmad estimates that methanol imports will surge to 2.5 million tonnes.

The construction of the plants is a mandate from the Ministry of Agriculture and has been approved by the Danantara Investment Management Agency. He assured that the feasibility studies for the plant construction have also been completed. In addition, Pupuk Indonesia has signed a memorandum of understanding with Mubadala for the plant in Lhokseumawe, Aceh. Meanwhile, the plant in Bontang, East Kalimantan, is still in process.

The selection of the two construction sites is based on the availability of gas resources needed for production. In addition, Rahmad stated that Pupuk Indonesia already has industrial zones in those areas, which can accelerate the plant construction.

Rahmad said Pupuk Indonesia is still calculating the capital expenditure for the plant construction but has agreed on its requirements. He estimates that the plant construction will take about 40 months.