Supporting B50, Bahlil Pushes for Methanol Plant Construction in Bojonegoro

The Ministry of Energy and Mineral Resources (ESDM) is pushing for the acceleration of methanol plant construction in Indonesia, partly to support the implementation of the 50% biodiesel mandate, or B50. This aims to ensure the availability of raw materials for blending B50 while strengthening national energy self-sufficiency.

Minister of Energy and Mineral Resources Bahlil Lahadalia explained that the implementation of B50 has triggered a surge in methanol demand for the production process. He asserted that the government will soon build methanol processing facilities in two strategic locations to independently cover the raw material shortfall.

‘With the emergence of B50, there is an increased need for methanol. We need around 2.5 million tonnes of methanol per year just for B50,’ he said on the sidelines of the B50 Mandate Launch event at the KM 57 Rest Area on the Jakarta-Cikampek Toll Road, as quoted on Friday (10/7/2026).

The construction of the methanol plant will be focused in Bojonegoro, East Java, using natural gas as a feedstock, and in East Kalimantan through a coal downstreaming scheme. The energy authority is targeting the groundbreaking ceremony for the project to take place this month.

‘So the next step is we are pushing to immediately build the methanol industry. This is in East Java, and we will also conduct the groundbreaking this month. And then in East Kalimantan, it is part of coal downstreaming,’ he explained.

Director General of New, Renewable Energy and Energy Conservation at the Ministry of ESDM, Eniya Listiani Dewi, added technical details regarding the production process at the two locations. She mentioned that the project in Bojonegoro will rely on natural gas supply through steam reforming technology.

‘For Bojonegoro, the model uses gas for the process. It will use natural gas, using steam reforming, if I am not mistaken, that is the technological term,’ said Eniya.

Meanwhile, for the facility in East Kalimantan, the government will optimise the potential of low-rank coal through gasification technology. This technology will convert the mined commodity into synthetic gas (syngas) before it is ultimately converted into methanol products used for biodiesel blending.

‘In Kalimantan, it is low-rank coal, so gasification using syngas, syngas to methanol. That is feasible,’ she concluded.